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Pamodzi Gold's mines bid on hold

By Marcia Klein | Aug 31, 2009 | COMMENTS [ 0 ]

THE future of Pamodzi Gold's mines is once again in question after Harmony suspended its R405million bid for the distressed mining company's Free State operation on Friday.

Free State is one of three Pamodzi mines in provisional liquidation.

Harmony had been negotiating with the liquidators since April and its bid had already been accepted.

In fact, it was understood that it was about to sign the deal with the liquidators when it suddenly called a halt to the proceedings. It said it had suspended its bid "in order to allow all stakeholders an opportunity to assess the proposed recapitalisation".

Harmony was referring to an announcement just over a week ago by members of the gold company's holding company, Pamodzi Investment Holdings, Ndaba Ntsele and Kobus du Plooy, that they had secured R626million from the China Africa Development Fund to recapitalise all four of Pamodzi Gold's operations in provisional liquidation.

Ntsele and Du Plooy had called for the liquidation process to be paused while they presented their bid.

Enver Motala, one of the provisional liquidators, said yesterday that Harmony's retreat had left the liquidators with "a huge problem", as they now did not have any money to maintain the Free State mine on a care and maintenance basis going forward. This is costing between R8million and R11million a month.

It is understood that the liquidators will today ask PIH to provide the funding for September.

The Industrial Development Corporation, which had already put forward R50million to keep the mines going, on top of its R200million loan to Pamodzi Gold prior to its liquidation, is understood to have told the liquidators it would not put any more funding now that the process has been scuppered.

Meanwhile, executives from Aurora Empowerment Systems, which was announced as the preferred bidder for Pamodzi's Orkney mine, visited the Free State operation yesterday and are said to be interested.

Aurora, headed by scions of the Mandela and Zuma families, has made a successful R215million bid for Orkney, another Pamodzi mine in provisional liquidation.


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