Goliath Gold, the new gold-based development company, is a possible contender for at least one of Pamodzi Gold’s mine, now that the removal of Aurora Empowerment Systems as the mines’ management has thrown open the opportunity for new bidders to the struggle.
Goliath Gold, which was spun from Gold One (ADT) late last year, on Monday issued a cautionary statement, said it was “entered into negotiations which, if successfully concluded, may have a material effect on the price of securities of the company “.
The company focuses on deeper, longer-term assets, while gold One, a 74% stake in Gold holds Goliath is aimed at shallower deposits.
Both companies are run by Neal Froneman, a doyen of the mining industry and an aggressive dealmaker.
Barely two weeks ago, Froneman announced a large deal with a consortium of Chinese investors would be a strategic partner to be a Gold. A series of transactions, if successfully completed, would be a Gold An enterprise value of 5.6 billion Rand.
Froneman said at the time of unbundling Goliath’s Gold that the company was greedy and would be on the lookout for opportunities in South African gold sector.
Until now the focus is on exploiting the Mega Mine assets, which are situated east of Johannesburg, consists of operating the mine and the Sub Nigel Fountain Close, West Close and Saving Water Fountain prospecting areas.
It is because of this focus on the assets in and around Johannesburg, which Goliath is unlikely to play for a Pamodzi’s Orkney operations in the Free State to make. Grootvlei, on the other hand, near Springs. In fact, Grootvlei is just one of the assets covered by what is bundled with Pamodzi East Rand operations. Besides Grootvlei Proprietary Mines, the assets include Nigel Gold Mining Company and the Consolidated Modderfontein Mines.
The problem is however, expected the price.
Aurora was named the preferred bidder for Pamodzi’s Orkney and Grootvlei mines in late 2009 after Pamodzi went bankrupt.
At the time, Aurora was said to be paying 215 million for Orkney and rim edge for Grootvlei 390 million, with plans to inject at least 150 million rand in the mines.
But after the mines are removed, estimates of the recapitalization of the mines closer to 500 million euros.
This would affect the price offered for the assets, making it likely that new deals would be significantly lower than that offered by Aurora.
What is amazing is that Aurora was so much time to connect with the capital given. Under any other commercial deal would be started after a few months and a new buyer would be brought in without a second thought.
Liquidator Enver Motala by former accounts, Aurora was a hard time and they would get a break because she had promised to save all the jobs in the mines. By his own admission Motala, about 6,000 jobs were at stake.
In retrospect it is ironic, because under the management of Aurora’s mines’ employees not only lost their jobs, but many are immersed in poverty.
First initial Malaysian Aurora Backer not to put the funds they had promised, then GEM Management, a Swiss company, decided to return to Aurora, the list and a price to hold above a certain level. A so-called reverse listing in Aurora Labat Africa with control of the company has not complied with Labat’s increase and now it looks like last hope of Aurora, Chinese investors have also jumped ship.
Her last hope was Shandong Gold Mining, a Chinese state company, but by all accounts, this deal also all cases, but through, with media reports saying that Shandong was addressed directly to the mines, that Aurora is now removed.
Aurora was last week given three days time to the mines’ premises to evacuate. This came just days after the Justice Department announced that two of the six curators working on the liquidation Pamodzi was dismissed.
Motala, SBT Trust and Gavin Gainsford, of KPMG, were removed to “ensure the integrity of the liquidation process and the interests of the company, employees and creditors,” said Justice Department spokesman Tlali Tlali.
While celebrating the news of the liquidators’ disposal and the fact that Aurora’s interim management contract was terminated, the unions have called for the government to look at Aurora’s failure to take.
The Congress of South African Trade Unions (Cosatu) on Monday demanded that the government is looking into allegations that Aurora, with the complicity of the liquidators was asset-stripping of the mines by the looting and sale of equipment.
Suggested that the liquidators have received bribes for turning a blind eye to this.
Motala but has denied any claims of bias. In a 14-page media statement, 15 pages of ‘evidence’ guides, Motala said no way, the liquidators and favoring the protection of Aurora.
“There is simply no merit in these allegations,” Motala said. “The simple truth is that while the Aurora deal has its problems, care and maintenance, until recently, was provided by Aurora. This, combined with the fact that for a very long time there were no other meaningful offers on the table was the only reason that the Joint Provisional Liquidators in consultation and commissioned by the major secured creditors, were entertained, “he added.
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