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Aurora preferred bidder for Pamodzi's ER mine

By Marcia Klein | Oct 15, 2009 | COMMENTS [ 0 ]

AURORA Empowerment Systems, which has already bought liquidated Pamodzi Gold's Orkney operations, has been announced as the preferred bidder of the beleaguered gold company's East Rand operations.

Joint liquidator Enver Motala announced yesterday that Pamodzi Gold East Rand, which includes Nigel Gold Mining, Consolidated Modderfontein and Grootvlei, will be sold to Aurora for R390million.

Adding up Orkney, which was sold for R215million, Free State which was sold to Harmony for R405million and East Rand, there would be just over R1billion to distribute to the creditors of Pamodzi gold.

Motala said, however, that the amount that creditors would receive would depend "on what secured creditors will be prepared to settle for".

The East Rand sale has been approved by its major creditor, Hypo-VereinsBank of Germany. Aurora directors include Khulubuse Zuma and Zondwa Mandela, scions of two of SA's most important political families.

The liquidators said R200million of the purchase amount will be funded by Aurora's Malaysian counterpart AM Equity, which will also make another R150million available for capital expenditure on the mines.

The mines have been running only skeleton operations, but Aurora will be on site this week and will start getting the mines going again.

About 1600 workers are expected to be employed immediately, with the rest of East Rand's 3800 employees coming back over the next month.

Dawid Stander has been contracted by Aurora to ensure that all the necessary systems are in place for the future sustainability and long term stability of the mines.

The current life of the mines is about five years, and their lives need to be extended with the development of new blocks. They are marginal with grades of about 2,0grams per ton on average for the next five years.

Capital expenditure of R200million is required over the next five years to increase the life of the mine to 2025.

Mandela said Aurora is still planning a JSE listing. While it is not the biggest mining house, he said, it has a strategic foothold in the East Rand area.


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