Wits Gold to list in North America

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� Wits Gold to seek funds in 2007
� Wits Gold to tap US market
� Valuation is a problem � Marc Watchorn, Wits Gold CEO
� Scepticism hangs over Wits Gold

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Wits Gold to list in North America
Allan Seccombe
Posted: Thu, 30 Nov 2006

[miningmx.com] -- WITWATERSRAND Consolidated Gold Resources (Wits Gold) became aware of a number of obvious oversights in its JSE listing prospectus and 2006 annual report ahead of a full secondary listing on a North American exchange.

Wits Gold has been dogged by controversy since its JSE listing in April, with market watchers struggling to value the company, which has no operating assets and owns some of the deepest untapped gold deposits in South Africa. Wits Gold touts itself as a long-term option on gold and an exploration company.

Wits Gold said there were incomplete disclosures by some shareholders of how many shares they held.

We made a foul up

There was also an incorrect calculation of the number of shares to be used in determining basic, headline and diluted loss per share for 2004 and 2005. This was a result of a miscalculation of the number of shares to use because of a share split in 2005.

�There�s nothing sinister here. We made a foul up,� said CEO Marc Watchorn.

Adam Fleming was the indirect beneficial owner of 2.75m Wits Gold shares by the end of February 2006 instead of 2.5m as said earlier. The shares are held in two entities called Rhodora and HardyBay

The disclosure on the JSE electronic news service focussed on who are the people that bear influence in a number of trusts that hold sizeable stakes in Wits Gold.

�When the lawyers were doing the due diligence they needed that level of exposure. When we listed locally it went through fine,� said Hethen Hira, a manager at Wits Gold. �The lawyers said if we don�t disclose all that now we are going to have trouble down the line.�

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The general public in South Africa appears to have largely ignored Wits Gold, prompting the company to look offshore. It already has a level one American Depository Receipts programme in the United States.

�We are seriously considering a North American listing because we feel that�s where there is the most appetite for exploration stocks and a good understanding of the gold market,� Watchorn said, declining to give the location or timing for legal reasons.

�It�s very difficult to raise capital here (South Africa),� he said. Wits Gold is also reluctant to raise capital in South Africa because it doesn�t think its shares are at reflecting a true value.

The shares are trading at R60 each, giving it a market capitalisation of R1.5bn.

�We believe we are trading at a discount relative to our peers and under those circumstances we need to broaden our shareholder base and get our name out there,� he told Miningmx.

This would be a stock that would appeal to gold bulls who believe there is a lot more upside to the gold price. That thinking would match what the company�s management sees for the gold market.

�The original thought behind forming the company is that the gold price will go to four digits. In the next three to five years we wouldn�t be surprised to see gold in the $800 to $1,000 band,� Watchorn said.

Wits Gold is focussing its exploration attention of five gold deposits with inferred resources of 40m oz that are less than 2.5km deep and hopes to have a pre-feasibility study completed on at least one of those by the first quarter of 2009.

Wits Gold raised R30m in a private offshore placement in October to start the exploration. It will need a total of about R140m to complete the exploration of the five targets.

A 20-surface borehole programme has been designed and two drill rigs have started work to bring the deposits into the indicated and measured resource categories by first quarter 2009.

Wits Gold has a total inferred resource base of 159m oz and 134m pounds of uranium.

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