John Munro, Gold Fields
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» Pamodzi targets coal, iron ore investments
» RMB’s Kemp to head Pamodzi private equity


John Munro stakes his future on uranium
Brendan Ryan
Posted: Wed, 02 Apr 2008

[miningmx.com] -- The appointment of top Gold Fields executive John Munro to run the new uranium company being established by Pamodzi and Harmony on the West Rand puts extra needle into the competition under way to be South Africa’s dominant uranium company.

Munro (40) this week quit his position as executive vice president for corporate development at Gold Fields. He has worked for Gold Fields and its predecessor – Gold Fields of South Africa (GFSA) - since 1991 after he graduated as a GFSA bursar and started work at Northam Platinum .

As of May he starts running the $420m uranium company – dubbed “Newco” at this stage - that private equity fund Pamodzi Resources Fund Advisors (PRF) has set up.

PRF has the backing of two other private equity funds - First Reserve Corporation and AMCI Capital - while Harmony will retain a 40% stake in Newco.

Newco is now one of at least three groups intent on developing uranium projects on the West Rand with the others being First Uranium/Simmer & Jack along with Australian-listed Mintails.

Gold Fields is currently evaluating the extent of its own uranium resource contained in surface dumps on its mines around Carletonville while AngloGold Ashanti also has major dump resources in this area.

It’s understood Mintails had pitched hard to buy the uranium assets from Harmony and its management was bitterly disappointed to lose out to Pamodzi.

Former Harmony CEO Bernard Swanepoel took up a position as a non-executive director of Mintails earlier this year and it’s understood one of his areas of input concerns future strategic developments for the company.

Munro said he was approached about taking the position early this year. He said he had carried out a two month, personal “due diligence” on the project to satisfy himself that this was the right move to make.

The dominant private equity involvement in Newco is one of the aspects of the new job that turns him on.

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“This is a case of private equity meets resources which is exciting because, until now, private equity funds have largely kept out of the resource sector.

“One of the big advantages of being privately- controlled compared with being a listed company is that you are not on a continuous treadmill of short-term delivery.

“Instead, the focus is on a specific end-game and you are given the space in which to meet it. In this case I have three years to prove up Newco, build it and bring it into production,” Munro commented.

Munro’s assessment is that Newco is a project at “the right end of the risk/reward spectrum” because of the nature of its assets.

These consist mainly of the surface tailings dumps at the Cooke Section of Harmony’s Randfontein gold mine – in particular the huge Cooke Three dump – as well as the dumps that are part of the “old Randfontein” section of the mine.

Munro commented, “A key question mark in my mind was whether this was a quality uranium project. Newco has high value, well drilled surface dump deposits and that removes a lot of the risk from the development.”

Munro added he was looking for a change of career after the last eight years of extensive travel looking after Gold Fields’s various new projects around the world.

He has a young family that he wants to spend more time with and he also liked the concept of a “compact and self-contained project with very clear deliverables.”

“At Gold Fields I was dealing over very long distances with projects that had very long lead times.”