Pine Pienaar, former CEO Mvelaphanda Resources

Mvela cans deal

| Fri, 05 Jun 2009 09:19 In an interview on SAfm @ 18.15 on 4 June 2009 [miningmx.com] -- Mvelaphanda Resources has abandoned plans to buy a major mining asset that would have removed the need for it to delist from the JSE.

The JSE demanded that Mvela Resources dilute its 62% stake in another listed firm, Northam Platinum, by the third quarter or fall foul of rules that forbids such pyramid structures.

"First of all, that's not the main reason for us in terms of unbundling. Obviously, in terms of the JSE rules we are deemed a pyramid structure. But at the end of the day what is happening is the unlocking of a value. We are trading at a discount because of our holding company structure," former CEO Pine Pienaar said on SAfm Market Update.

Pienaar said he announced the unbundling to the market in February, to unlock the discount. "The board has evaluated the current environment, and I think in the current economic climate this is the more prudent way of addressing risk, and just go for a pure platinum play and unbundle the shares in Northam," he said.

Mvela retains its black economic empowerment (BEE) status. "All that happens is that BEE shareholders go down to the Northam level. Currently they hold 42% in terms of monetary value, and 42% of 63% - so they will be approximately 27% and have direct access to the underlying assets, cash flows into the future, and also the exciting development of the Booysensdal project into the future," Pienaar said.

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