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DRDGOLD to be "swallowed": Wellesley-Wood Posted: Mon, 29 Oct 2007 [miningmx.com] -- IT IS A YEAR since I left DRDGold, and this seemed to have triggered an “open season” for shooting CEO’s in South Africa. I always described myself as the reluctant CEO, as I originally came down to South Africa as a consultant on a six month ticket. I had started as a non-executive chairman and I think the only reason I was in the CEO job was that nobody else wanted it. The same was true at the end. DRD started from behind, with a hedge book and other liabilities that meant it had negative equity and value. Despite this, the Cinderella story worked, at least initially, but I must say we had more lucky escapes than Houdini. This really reflected our legacy of marginal mines. While we played to the option value of the reserves, we were at best a risky punt on these. When the rand strengthened, our risk profile in South Africa sky-rocketed, the call option went “out of the money” and we were forced to diversify. However, we could only afford to buy things that nobody else wanted – we managed to steal 20% of Porgera from under Placer’s noses for $72m. Barrick, Placer’s successor, bought it back three years later for $240m. Deep level gold mining in South Africa is becoming tougher and riskier and I think the DME (minerals and energy department) is right to crack down on safety. Our mines are getting deeper, the infrastructure is creaking and we have been hemorrhaging middle management skills for years now. While we got to a position of having more than half our assets and production offshore the regulations placed on South African companies by archaic exchange control regulations meant that you were usually fighting with one hand tied behind your back, especially when the Australians, turn it into a Tri Nations rugby match! Eventually, our offshore assets had to stand alone and so we got an Ozzie team to play in Ozzie rules. The recent JCI Circular records that the Kebbles spent R91m in a “dirty tricks” campaign to bring DRD and myself into disrepute. It didn’t work, but probably only because we won. The most hurtful thing about this was to see former friends and colleagues, in whom one had trusted, take the “Judas money” and pop up on the other side slinging sticks and stones at you. At the time, I think the market thought we were “crying wolf”, but, if the regulators and authorities in the country had paid more attention, then the bigger JCI fraud may have been avoided. It now appears that certain people were corrupted and that is a sad reflection on the vigilance of the country’s watchdogs. Ultimately the issue of my succession was fudged. Despite the engagement of several recruitment consultants, the hot seat was still too hot for anyone to handle. I stayed on for an extra year and probably outstayed my welcome. When I lost Ian Murray (financial director), who was my “right brain” and Paseka Ncholo (non-executive chairman), who was my “left brain” it began to feel pretty lonely at board meetings. I did succeed in hiring Brad Gordon to run a “new Emperor”, but on the condition that DRDGold went “hands off”. Now they are totally free of what was termed in “Oz speak” the “dead hand of South Africa”, as DRDGold has sold out. Niel Pretorius, who I then appointed to run South Africa for the company, on the other hand, is a true Springbok. With DRDGold now down sizing it eventually took the three; Brad, Niel and now John Sayers to keep all the plates spinning. Even then some broke! Click Here to subscribe to our daily newsletter
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