| |
Village might invest in gold
Allan Seccombe
Posted: Wed, 08 Oct 2008
[miningmx.com] -- BERNARD Swanepoel, a non-executive director of a JSE-listed cash-shell, will ask shareholders on Friday to approve a scheme to pump R20m rand into the company, allowing it to look for investments in minerals, including gold.
Together with former Harmony Gold finance manager Clinton Halsey, Swanepoel, the former chief executive of that gold producer, has started a consultancy/advisory company called To The Point, which holds 48% of Village Main Reef Gold Mining Company.
Swanepoel is obviously frustrated with the bureaucracy and time involved in getting Village to a position where it can start making acquisitions, but there are still a few hurdles to clear before it reaches that point.
The next is on Friday, convincing those of the 1,000 shareholders in Village who attend the meeting in Johannesburg to approve a scheme whereby To The Point will fully
underwrite a claw-back rights issue by Village for R20m.
Shareholders will also have to agree to waive a minority offer by To The Point if it increases its stake in Village.
If none of the Village shareholders asks for their pro-rata allocation of three shares worth R1.10 each from To The Point, then the latter will own 87% of Village.
If all shareholders follow their rights, then
To The Point will remain at a 48% shareholding level.
“My realistic expectation is that we will go through 50%,” Swanepoel said, adding the directors of To The Point were stumping up the cash.
“If we could have afforded it, we would have put in R50m,” he said, acknowledging that in the corporate world R20m doesn’t buy very much, but that the stake could be leveraged through debt into something a bit more substantial.
Talking to Miningmx in August, Swanepoel said an investment in gold was unlikely and punted the merits of coal.
On Wednesday, Swanepoel told a media briefing gold could well be on the cards as would a possible investment in Zimbabwe, but not in precious metals, meaning it could be coal or another mineral.
"If we truly were to go back into gold, gold tends to be to the exclusion of everything else. It's quite a fundamental decision because then this vehicle will be a gold vehicle," he said.
"We set out at To The
Point to go into that space where you take a smallish entity and make it bigger," he said. This will mirror what Swanepoel during his tenure at Harmony, taking it from a single mine into the world's top five gold producers.
"I've had a lot of time to think through this. Am I going to try repeat what I did in the past? No, because it might just be in coal. Am I ready to have the fun of taking something small and hopefully creating value... through a slightly different approach, that excites me," he said.
The gold industry, so many years after he snapped up marginal mines, stripped costs to the bone and made them profitable, could still offer such opportunities, he said.
"The fact that it is very similar 10 years later in the gold industry is much more a reflection of the industry than of me, quite honestly. To be still be able to take 20% out of an operation run by a mining house tells you more about them," he said.
"I'm not going back to gold
because I'm homesick, but because the opportunity is still there 10 years on makes it interesting."
The rights issue and capital raising should be completed by early 2009 and the company will decide by the end of February on what minerals and strategy it will follow.
| |
0% 
