Peter Steenkamp, CEO Pamodzi Gold
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» Pamodzi Gold's funding plan in tatters
» Pamodzi Gold's loan deal misses July target
» Pamodzi to exchange gold for loan
» Reviving two old mines will kickstart Pamodzi
» Pamodzi to raise $50m by end-May
» Two more big buys pending for Pamodzi Gold

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Pamodzi Gold sets September for loan
Marc Ashton
Posted: Mon, 25 Aug 2008

[miningmx.com] -- EMBATTLED gold miner Pamodzi Gold expects crucial funding needed to re-capitalise two large but run-down mining operations will be in place by next month.

"We should have the funding in place by the end of September" said Pamodzi Gold CEO Peter Steenkamp, who was speaking at the conclusion of the company's annual general meeting (AGM) held in Johannesburg on Monday afternoon.

There was an expectation from some of the AGM's attendees that tough questions would be asked of Steenkamp and his team following the August 15 announcement that Pamodzi Gold had failed to secure a vital $50m loan from a London-based institution.

The funds are needed to recapitalise the Orkney mine bought from Harmony in exchange for shares, and the President Steyn mine bought from Thistle.

Despite major shareholders such as Harmony Gold, with a one-third stake, and the Pamodzi Resource Fund being represented at the meeting, all motions were passed without question and shareholders appeared to be firmly behind Pamodzi Gold management.

Steenkamp indicated that "a major South African institution" was currently putting together a consortium to provide the capital that would bail Pamodzi out of its precarious position and that the details of the transaction could be expected by the end of September.

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Harmony connection?

When quizzed on whether Harmony was the angel investor providing the capital, Steenkamp said "it might be. Harmony has always a been a good loyal supporter and shareholder".

This contradicts statements made by Harmony CEO Graham Briggs, who previously told Miningmx his company "would not become involved in funding or in the operational issues at the junior company".

Given that Pamodzi chairperson Ndaba Ntsele failed to identify Harmony company secretary Marian van der Walt as representing the miner at the AGM, one would assume that Harmony is not the South African institution to which Steenkamp is referring.

Steenkamp said the new proposal would give Pamodzi better terms than the previous deal: "The terms would be less onerous and would provide the company with a better time frame over which to operate," he said.

Under the offshore investment plan, Pamodzi would have had to repay part of the loan in gold.

Pamodzi has been expecting to finalise the loan every month since May. Miningmx has been contacted by suppliers to the Orkney and President Steyn mines, who have said non-payment for goods and services rendered was becoming an issue.

At 16:00 on Monday, Pamodzi Gold's share price was up 3.03% to 170c.