PGMs - junior sector analysis

Fundamental to SFA (Oxford)’s comprehensive research and analysis of the present and future PGM market is our detailed analysis and benchmarking of junior sector companies. Our analysis identifies distinguishing features of each project/junior company, such as geology, reserves and resources, mining method, scale, depth, timing, status, off-take agreements and ownership. Additionally, market valuation and indicative project valuation assessments are undertaken.

Prior to 2003, there was virtually no junior PGM sector in South Africa and the majority of production was controlled by a handful of major companies. The introduction of the Mineral and Petroleum Resources Development Act in 2003 changed the legal landscape such that the state became custodian of all mineral resources, and could determine the right to prospect and mine for any and all minerals in South Africa. This represented a significant change in legislation which opened the market to new participants for the first time, creating a surge of junior PGM mining companies exploring and evaluating many new projects.

SFA (Oxford) is able to conduct detailed SWOT and PEST analysis using a combination of modelling of these junior projects and our knowledge of industry economics, regional politics and socioeconomics. This can be used to highlight strategic opportunities within the junior PGM sector or assist junior companies to identify value-adding possibilities within the industry and to communicate market investment opportunities for the company/project.

To augment our analysis of the junior sector, we can:

Compare project economics against the established producer peer group
Use supply/demand fundamentals to identify windows of opportunity for project start-up
Present strategic considerations within the PGM value chain
Offer price forecasts for project evaluation, feasibility and listing purposes, using mine closure and project inducement theory as well as market fundamentals
Provide indicative project and company valuations for strategic investment purposes

The majority of the projects covered in our bespoke analysis are at pre-feasibility stage or later, except for a few exceptional earlier stage projects of significant potential.