PAMODZI MINES FIND KEEN BUYERS
AURORA Empowerment Systems, which is run by Zondwa Mandela, Nelson Mandela's grandson, and chaired by Khulubuse Zuma, the nephew of President Jacob Zuma, was announced yesterday as the preferred bidder for Pamodzi Gold's Orkney operation.
Aurora, which also has a controlling interest in JSE-listed cash shell Cenmag, announced last month that it had bought Redwood Timber Merchants, a Zambian forestry and sawmill company, for R93,5million. Orkney is its second big investment.
Aurora bid R215million for Orkney. This will be funded through a R200million rights issue and vendor placing, underwritten by Malaysian private equity fund AM Capital.
The R15million balance will be paid in cash.
Aurora would also invest R150million in working capital.
Mandela said the initial focus would be on increasing operating levels by improving on shafts, which would cost about R150million over five years. He hoped to bring monthly output, which was around 170kg under Pamodzi, to 250kg.
Louis Bezuidenhout, the mine manager at Orkney, said with a cash injection on the seventh shaft, production could be brought up to 200kg within six months, and up to 250kg within a year.
Aurora has indicated to the provisional liquidators that it would not retrench any of the 1500 permanent employees of Orkney, saying the first 332 would be re-employed on September 1 when Aurora starts mining activities.
Mandela said Aurora hoped to increase its portfolio in precious metals and diamonds.
He said Orkney could be injected into a listed entity, but that an announcement in this regard would be made later.
The Malaysian funder would have an interest in the mining operation.
At the announcement, joint provisional liquidator Enver Motala said the sale of the last mine in liquidation, East Rand, was proceeding and that there were four interested parties conducting due diligence.
Another Pamodzi mine, Pamodzi Gold Free State, is being sold to Harmony for R405million.
Pamodzi Holdings, meanwhile, said it had secured funding of R626million and was hoping to save Pamodzi Gold, but the liquidators said the offer was too little, too late.