Miranda Minerals Holdings Limited
Nature of business
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With its wide spread of mineral interests, Miranda has been able to critically examine the commodities market, identify trends and concentrate development activities on those minerals that offer the most viable returns for shareholders.

The coal fields of KwaZulu-Natal, which were home to coal mining activities for generations, offered the most opportunities. By concentrating on these older ‘brownfield’ sites, which still contained significant deposits of coal that miners with the limited technologies of the time were unable to unearth, Miranda has been able to identify several sites that presented exploration potential. In addition, in a resource and energy-hungry world, demand for coal is expected to continue growing, offering a ready market for the export-quality coal that should soon emerge from Miranda’s sites.

Traditionally, junior mining companies in South Africa have faced several challenges. Central to these is the ability, in the early years of the development cycle, to undertake extensive and costly exploration. As these exploration processes are intensive and involve people with specific skills, shareholders cannot expect an early return on their investment. In order to meet these challenges Miranda has adopted a role that places it in the market primarily as a facilitator of mineral mining projects. At the core is a team of experts who are responsible for the day-to-day administration and have a strong focus on the processes required to move into physical mining of Miranda’s coal deposits.

Strengthened through strategic appointments at a Board and executive level, Miranda’s focused team is responsible for contracting the skills required for specific phases of development. This ensures that a team of specialists in fields as diverse as corporate finance, law, geology and open cast mining are available to assist at various stages of a project without incurring the fixed overhead costs of having these skills ‘in-house’. Through this outsourcing approach Miranda can develop strategic and operationally-based partnerships using geological information to independently identify actions necessary to unlock the value inherent in each project, financial viability and the value of each project.

Miranda, operating within this model, can then concentrate on:

  • Developing a ‘pipeline’ approach to projects and ensuring that there is continual activity, with projects reaching maturity as demand peaks for various commodities in different markets; and
  • Ensure that early development of sites occurs and that delivery is accelerated.

As a consequence of its approach to business Miranda is able to determine the level of involvement it requires in identified projects. Each project can be evaluated on the strategic advantages, the risks involved with development and the returns offered.

Miranda, as in the case of its KwaZulu-Natal coal holdings, can then make an informed decision about whether it is desirable to be actively involved in a project or rather ‘contract in’ the necessary expertise. Alternatively, a more passive position can be adopted, with Miranda securing its interests through a revenue sharing agreement, or disposing of a project in its entirety.

In the case of a disposal, management and the Board would make the decision based on ‘core value’ of the particular project to Miranda, and whether funds raised could be funnelled into more financially beneficial projects.

As Miranda has holdings across a number of strategic base minerals, income generation and the creation of an annuity stream of income can be undertaken as projects across a spectrum of interests reach maturity.

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