Peter Major

Simmers is perfect to mine Orkney

| Mon, 22 Jun 2009 09:18 In an interview on SAfm @ 18.15 on 19 June 2009 [miningmx.com] -- Simmer & Jack was right to withdraw its offer for Pamodzi Gold's Orkney mine, but Peter Major from Cadiz Corporate Solutions hopes Simmers will make a new offer since it is the perfect company to mine the asset.

Last week, Simmers declared its offer for Orkney to have lapsed, to the annoyance of provisional liquidator Enver Motala.

Simmers CEO Gordon Miller said the company had complied with a timeline set by the liquidators to submit a bid that was valid until last Friday.

"I don't think anybody can do a better job on them or can show a better return on investment than Simmers can. If they have to pay too much, though, I don't think they will get it and I think somebody else will battle to make it fit in. There's a lot of synergy with the Simmers operations on these assets," Major said on SAfm Market Update.

Major said if Simmers acquires Orkney, it would have to put double the amount it pays for it into fixing the mine up. He estimates it will be two to three years before Orkney shows a decent packback.

Simmers withdrew its bid based on the economic climate. "You go into a mine like Pamodzi's Orkney operation, and you add up what you think it's going to take, and then you have to make a stab at what kind of rand/dollar relationship can we base this on, what kind of gold price can we base this on?

"So you put in those estimates and you make a bid. But boy, that can change within days, it can definitely change within weeks. So you put a bid in based on everything you know at the time, but you're not going to leave that bid in for weeks or months and let the administrator, adjudicator decide when he's going to accept it," Major said.

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