KCM secures Chinese mandate

Marc Hasenfuss | Wed, 26 Aug 2009 16:20

[miningmx.com] -- DIAMOND mining group Kimberley Consolidated Mining (KCM), suspended on the JSE earlier this year for failing to publish its audited statements for the year to end February, is now claiming a Chinese mandate.

KCM advised shareholders on Wednesday that it had been had mandated to negotiate with third parties to secure mining opportunities in South Africa for China National Geological and Mining Company (CNGMC).

KCM indicated that CNGMC would provide the "necessary finance" required if any transactions are concluded.

This is an important rider as KCM currently cannot mobilise its suspended scrip to settle transactions, nor does the company have a balance sheet that can accommodate any meaningful acquisitions.

CNGMC, though, is not exactly a heavyweight in the resources sector. It would seem the company owns a handful of mining interests in African projects - including the Ivory Coast, Eritrea and the Democratic Republic of Congo.

KCM indicated the CNGMC mandate was irrevocable and valid for 12 – but excluded any diamond assets.

The assets acquired under the mandate would be reversed into KCM, which may prompt questions around whether KCM’s existing diamond mining interests – which include the much-vaunted Bo-Karoo mine - are still viable.

At this point it is impossible to determine the status of KCM’s mining and exploration projects as the company has not released audited statements for the year to end-February 2009. These statements – which would also enlighten shareholders on the financial position of the company - were due for publication at the end of May this year.

Wednesday’s announcement did not allude to the financial statements, which is unfortunate since KCM shareholders have still not been officially informed why it has taken so long to publish the year to end-February results.