Blyvoor: AngloGold steps in

[miningmx.com] — DRDGOLD has accepted an offer of help from AngloGold Ashanti for its distressed subsidiary Blyvooruitzicht Gold Mining Company (Blyvoor), it said on Thursday.

In terms of the offer, AngloGold Ashanti would sell Blyvoor some 390,000 square metres of its neighbouring Savuka mining area for R35m, DRDGold CEO Niel Pretorius said in a statement.

If the necessary regulatory approvals were given and subject to a final binding agreement, Blyvoor would mine the area under contract.

“We believe that there may be potential for Blyvoor to generate significant free cashflow by mining the Savuka ground, which will help to restore its ‘going concern’ status, an important consideration for prospective lenders and suitors,” said Pretorius.

On June 23, DRDGold said it would no longer finance Blyvoor which needed about R80m to keep going until the end of 2011. It owned 74% of Blyvoor, which it had been trying to sell.

The company has also appointed a company rescue specialist for Blyvoor.

In terms of the new Companies Act, a distressed company can appoint a certified rescue practitioner to save the business.

Peter Van den Steen had been appointed as Blyvoor’s business rescue practitioner and he had 25 working days – until 12 August – to produce a rescue plan.

It also said it was in talks to a potential Chinese investor for Blyvoor.

China’s resource-focused investment in Africa has mostly side-stepped gold producers but a Chinese consortium has taken steps to take a majority stake in Australia and South Africa-listed Gold One International.