Bernard Swanepoel
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Swanepoel sets a 6-month target for deal
Allan Seccombe
Posted: Mon, 11 Aug 2008

[miningmx.com] -- Within the next six months Bernard Swanepoel, the charismatic former CEO of Harmony Gold, wants to wrap up his first acquisition since leaving that company that he helped build into one of the world’s largest gold producers.

It appears highly unlikely the transaction through the JSE-listed cash shell of Village Main Reef Gold Mining Company will have anything to do with gold and will most probably be in the coal sector.

Swanepoel told Miningmx in an interview that there are a number of steps that have to be completed before such a transaction can be made.
Our first deal must be a good one
These include completing the offer to minority shareholders in Village towards the end of August as well as spending two more months raising seed capital of around R20m through a rights issue to re-capitalise the company and doing “a lot of housekeeping things” like articles of association for example.

Once that’s done the decks are clear for action.

“Our first deal must be a good one that enough people will like so that if we need to raise money, if we need to, there’ll be enough support,” Swanepoel said from modest offices north of central Johannesburg.

“The money we’ll need to raise will always be relatively small,” he said. He declined to give any details of what the coal project might be.

“Village needs to become a mining company. I really think we are talking about a six month objective of being a mining company, be it a mining investment company en route to becoming an operating company or vice versa. We will be up and running,” he said.

“Nobody will seriously engage with us until we have a ready vehicle. Our key activity now is to panel beat Village back into shape, give it a spray paint, get some new tyres on it and make its something we can work with.”

Swanepoel has made an emphatic return to his entrepreneurial roots, but in this case he’s starting off with far less than when he was handed the chief executive role at Harmony in the Randgold stable of companies in 1995, more than quadrupling output to three million ounces in a decade.

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Together with former Harmony finance manager Clinton Halsey, Swanepoel has started a consultancy/advisory company called To The Point, replete with an arrow as part of its company logo. During -- and subsequent to -- his tenure as Harmony CEO a similar arrow was used in that company’s quarterly reports and annual financial statements.

A far more important carry over into To The Point from Harmony is highly qualified staff. Four of the six people at To The Point are former Harmony employees. Another, Ferdi Dippenaar, his right hand man at Harmony and now CEO of Great Basin Gold, has joined him as a non-executive director at Village.

To The Point offers services as a consultancy, with notable clients being Central Africa Mining and Exploration (Camec) in the Democratic Republic of Congo, and Australia’s Mintails, a tailings treatment company with operations in South Africa. Swanepoel is a non-executive director at both companies.

The consultancy business takes up a lot of time, time Swanepoel would rather spend on growing To The Point and so it will be scaled down.

The advisory side of the business will be maintained because, unlike consultancy where a fee is paid, it offers an opportunity to identify and take stakes in junior South African companies which have assets and need help realising value from them.

A perfect example is the 10% stake To The Point took in Dengetenge Platinum Corporation owned by Lontoh Mineral Resources, a division of the unlisted Lontoh South Africa, an investment, financing and commodities firm based in Johannesburg.

The early stage Dengetenge project, with inferred resources of 10 million platinum group metal ounces, is down dip and across a fault from Eastern Platinum’s Kennedy’s Vale project near Steelpoort on the Eastern Limb of the Bushveld Igneous Complex.

Dengetenge Platinum has a portfolio of assets with a potential 20 million oz of PGMs.

Lontoh Resources owns Vhakoni Energy Ltd, which has a number of coal properties and plans to produce 1.5 million tonnes of coal a year for the domestic and international markets by 2010.

Lontoh also has gold and iron ore assets in Africa.

Swanepoel is clearly relishing being out of the corporate environment for a number of reasons.

“By choice and by design we are out of the corporate world, where fund managers can really have indirect control of your life and into this space where you have control over your life and your investor profile is different.”

It will be interesting to see what the response of the market and financiers would be to any major fund raising by Village given the current market environment in which capital raising exercises by two juniors recently, namely Lesego Platinum and Pamodzi Gold, have proved difficult.

Swanepoel does come with a strong deal-making pedigree, as does Halsey from his days at both at Harmony and DRDGOLD.

“When we need a lot of money then we will see if people believe in our skills. When we need outside money we will then need to convince people that we can do smart deals,” Swanepoel said.

It’s no good investors holding their breaths for Swanepoel to do something dramatic in the gold sector. He sees the sector as largely tied up and it’s unlikely to come under any specific focus for another six to 12 months.