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With South Africa producing over 70 percent of the world’s platinum, it’s no surprise that major producers Anglo American Platinum (JSE:AMS), Impala Platinum (JSE:IMP) and Lonmin (LSE:LMI) make the most headlines when it comes to platinum stocks.

However, given that a five-month strike put a big dent in output (and revenues) for those companies in 2014, some investors are no doubt looking at platinum projects in other regions of the world.

Here’s a look at platinum stocks outside of South Africa, as well as platinum stocks in the country that are smaller than the major producers mentioned above.

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Platinum stocks outside South Africa

Stillwater Mining (NYSE:SWC)

Stillwater Mining is the only US producer of platinum-group metals (PGMs), as well as the largest primary producer of the metals outside of South Africa and Russia. Its operations include the Stillwater and East Boulder mines in Montana, as well as a smelter, refinery and laboratory in the state. Stillwater also has a PGMs recycling operation where it recovers platinum and palladium from spent autocatalysts from vehicles.

Stillwater has seen some losses this year — its share price is down 37.72 percent year-to-date. It has also struggled to come to a labor agreement with union employees at its facilities. In August, the company reported that it would reduce its workforce by 119 employees, citing a deteriorating PGMs market. It has also modified its mine plan to focus on the most profitable areas within the Stillwater mine.

Wallbridge Mining (TSX:WM)

Wallbridge Mining is currently producing copper and PGMs at its Broken Hammer mine in Sudbury, Ontario, along with gold and silver. For the first half of 2015, Broken Hammer produced 87,000 tonnes of ore containing 1.8 million pounds of contained copper, 4,400 ounces of palladium, 5,000 ounces of platinum, 1,400 ounces of gold and 8,900 ounces of silver. The mine was closed from March 28 to June 1 due to municipal road load restrictions, and that impacted cash flow for the quarter.

However, Wallbridge is also advancing exploration properties in Ontario. After uncovering nickel-copper-PGMs mineralization at its Parkin properties in June, it signed an agreement for up to C$11 million in funding from South African PGMs producer Lonmin.

Wellgreen Platinum (TSX:WG)

Wellgreen is advancing its Wellgreen project in Canada’s Yukon. The company announced the results of an updated preliminary economic assessment for the project in February, outlining average annual production of 208,880 ounces of platinum, palladium and gold, as well as 73 million pounds of nickel and 55 million pounds of copper over the first 16 years of its 25-year mine life. The company has said that would make the mine one of the two largest platinum-producing mines outside of South Africa and Russia.

There has not been much further news from the company in 2015, although it did provide a project update at the end of May, stating that preparations are underway for a $4.2-million Phase 1 drill program at Wellgreen.

Transition Metals (TSXV:XTM)

Project generator Transition Metals holds interests in a number of different exploration projects in Canada, including its Itchen Lake gold property in Nunavut, Haultain gold property in Ontario, Janice Lake copper property in Saskatchewan and Sunday Lake platinum-palladium-copper-nickel project in Ontario. Transition announced this past August that it will commence the next phase of drilling at Sunday Lake with its joint venture partner, Impala Platinum.

Sudbury Platinum

A subsidiary of Transition Metals, Sudbury Platinum is focused on advancing the Aer-Kidd property in Sudbury, Ontario. In May, Sudbury reported additional assay results from the property, including further intersections of copper-nickel-PGMs mineralization.

“We continue to be encouraged by the precious metal content of the mineralized zones. We have now defined mineralized trends based on geology, geophysics and mineralization that highlights the further potential at depth,” said Sudbury Platinum CEO Scott McLean. “Pursuit of similar trends at depth at Totten and Victoria adjacent to the Aer-Kidd Property has resulted in two of the most significant discoveries in the Sudbury camp in recent years. Our plan moving forward is to pursue these corridors at depth where we feel that there is excellent blue sky exploration potential.”

Rockland Minerals (OTCMKTS:RKMNF)

Rockland is focused on its Blue Lake copper-nickel-PGMs project in Quebec’s Labrador Trough. The company recently concluded summer exploration work at Blue Lake in August, and five of seven holes drilled encountered heavily disseminated and massive concentrations of magmatic sulfides over significant lengths. Assay results for the holes are still pending.

Polymet Mining (TSX:POM,NYSEMKT:PLM)

Polymet is developing the NorthMet copper-nickel-precious metals project in Northeastern Minnesota. The company is working towards completing an environmental review for the project, and recently received $6 million in secured debenture funding from Glencore (LSE:GLEN). The payment is part of a $30-million loan facility due on March 31, 2016.

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Platinum stocks within South Africa

Ivanhoe Mines (TSX:IVN)

Headed by mining financier Robert Friedland, Ivanhoe Mines has been getting attention for its copper projects in the Democratic Republic of the Congo lately. The government recently dropped its previous objections to a transaction between Ivanhoe and China’s Zijin Mining (HKEX:2899).

However, the company is also developing the massive Platreef project in South Africa, for which it released a prefeasibility study in January. According to Ivanhoe, the mine is slated to be the lowest-cost producer of PGMs in Africa. In February, the company reported that box cutting was underway ahead of construction of shaft collar infrastructure for the mine.

Platinum Group Metals (TSX:PGM)

Focused on its Waterberg joint venture project in the Bushveld Complex in South Africa, Platinum Group Metals is targeting platinum production in 2015. The company reported in July that construction at the mine was roughly 90 percent complete, and that mineral resources and reserves at the project had been updated in order to account for increased use of mechanized mining methods.

Platinum Group Metals also announced an increase to indicated and inferred resources at Waterberg on July 22.

Eastern Platinum (TSX:ELR)

Last November, Eastern Platinum entered an agreement to sell its South African assets to China’s Hebei Zhongbo Platinum. The company agreed to restructure the deal back in June, and received approval for the deal from the South African competitive authorities in September.

Did we miss a platinum stock outside South Africa? Please let us know in the comments!

 

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

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Why is Eastern Platinum’s Share Price On the Rise?

Investors keeping an eye on companies in the platinum space will no doubt have noticed that Eastern Platinum’s share price is on the rise. Shares of the company were up 12 percent to $1.96 on Tuesday, and have risen nearly 40 percent so far this year. However, there hasn’t been

blue graphInvestors keeping an eye on companies in the platinum space will no doubt have noticed that Eastern Platinum’s (TSX:ELR) share price is on the rise. 

Shares of the company were up 12 percent to $1.96 on Tuesday, and have risen nearly 40 percent so far this year. Since it was announced last November that Eastern Platinum would sell substantially all of its South African assets to China’s Hebei Zhongbo Platinum, the Eastern’s share price has gone up by about 130 percent.

At the time of the announcement, Eastern Platinum CEO Ian Rozier stated that the company would be “extremely well capitalized” following the transaction, while market commentators such as James Fraser of CEO.ca pointed out that the deal could mean as much as $3.25 cash per share for shareholders.

Since then, the company has reached an agreement to buy out its minority interest partners in light of the deal and has seen approval from shareholders and from the Chinese government for the transaction. On April 9th, break fees of US$11.25 million were placed into escrow by each party, as per the terms of the agreement.

On rising prices and insider buying

According to Rozier, it’s that progress towards closing the transaction that’s stoking interest in Eastern Platinum stock.

“Over the last 3 months investors have continually been quantifying the risk of the deal possibly not completing,” he said via email. “However, with shareholder approval, Chinese government approval to do the transaction, and the recently reported payment of the ‘break-fee’ by Hebei Zongbo, I think investors are feeling more confident that the transaction will complete. On the basis that upon completion the stock would  have a cash value of over $3.00 per share, the stock is becoming more attractive with time as the risks are reduced.”

Furthermore, it’s worth noting that Eastern Platinum has seen a fair bit of insider buying in recent months. Salida Capital International and Harrington Global Opportunities Fund acquired roughly 2.7 million shares each at $1.54 per share on March 16, with both purchasing a further million shares at $1.61 on April 9th.

When asked what might be drawing those investments from Salida and Harrington, Rozier suggested that both parties are “very sophisticated investors” with a good understanding of the situation.

“They understand the transaction, they understand South Africa, and they know management,” he said. “I think this buying just reflects more confidence on their part in the deal closing.”

What’s next?

The formal closing of the deal still depends on approvals from the Competitions Board in South Africa and from the country’s Department of Mineral Resources (DMR) with respect to change of control of the assets, Rozier noted. Still, he said that Eastern Platinum is hoping to see the process completed within two to three months.

Certainly, investors and market watchers will be keeping an eye out for more news from the company. In terms of other plans it might pursue following the closing of the transaction, Eastern Platinum has not made any formal announcements, and Rozier wasn’t able to comment on any future opportunities that the company might be considering at this time.

 

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 

Related reading:

Eastern Platinum Jumps Over 120 Percent on Asset Sale

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