Voice of reason at Transnet

[miningmx.com] --

Transnet

Former Transnet CEO Maria Ramos was a hard act to follow but chief financial officer Chris Wells – who has taken over as acting CEO - is coping just fine.

Wells does not want the top job. He does not need the money or the stress and is only standing in until a full-time replacement is found for Ramos.

As CFO you would expect Wells to have an excellent grasp of the financial and operating situation and he showed at last week’s presentation that he does, but whoever eventually takes over from him would be well-advised to follow Wells’ balanced approach to media relations.

Wells climbed into a Sunday newspaper for irresponsible reporting but he also acknowledged that Transnet had been the cause of much of the problem on the Richards Bay coal line in 2007 and most of 2008.

That’s something Siyabonga Gama, CEO of Transnet Freight Rail which runs the line, has never done. He has always blamed the mines.

Wells said that, since September last year, Transnet has gotten its act together while the mines were now falling short on output. Despite that, he stressed Transnet would maintain its commitment to the Richards Bay line in terms of management and rolling stock in an effort to boost throughput counting on better production from the mines later this year.

He said Transnet’s latest projections were that coal volumes for the current financial year could end up in the low 60mt bracket. “We don’t want that. We are pushing to ensure the final number comes in around 64mt to 65mt.”

Mintails

Mintails shareholders are going to have to wait until Monday to find out what is happening regarding the offer made for the company because a decision is now only likely at a board meeting to be held on Sunday.

The trading halt on the shares which are listed on the ASX was supposed to be lifted on Friday but has been extended until Monday.

Following denials by Gold One International, Gold Fields, and First Uranium/Simmer and Jack that they are involved it looks increasingly likely that the suitor is DRDGOLD. CEO Niel Pretorius has declined to comment.

According to the latest Mintails statement the proposal under consideration “involves the acquisition of the company’s South African assets at a price based upon an implied value determined by the reference to the 30 (day) VWAP of the company’s shares. The proposed consideration is shares in the acquiring company.”

The scene looks set for some hard decisions because the “implied value of Mintails assets” is no way accurately reflected in the 30 day VWAP where the share performance has been lousy.

Mintails shares traded as high as A$0.70 in late 2007 before plunging to around A$0.02 earlier this year from which it recovered to levels around A$0.05 before the latest suspension.

Another problem area could concern the technicalities of payment in DRDGOLD scrip. DRDGOLD is not listed on the ASX but it seems the majority of Mintails shareholders are resident in either South Africa or the UK and so that may not prove too much of an issue.

Pan African Resources

The decision by Metorex to sell its controlling stake in Pan African Resources could turn out to be a turning point in the junior gold miner's development.

Pan African has simply not delivered for investors up till now despite making all the right moves in response to changing market conditions affecting investor sentiment.

Having started out as a pure exploration outfit, Pan African acquired Barberton Mines from Metorex when the market turned against explorers. Investors at that point preferred companies that were producing gold and generating cash flows to fund their exploration work.

But the Barberton acquisition involved a reverse takeover of Pan African by Metorex which locked up 54% of the stock greatly reducing the “free float” which, it seems, institutional investors did not like either.

The AIM listing has also not really delivered for Pan African while trading on the JSE since the company was dual listed here has been illiquid. Hopefully that will change with more shareholders on the South African register.

View of some mining entrepreneurs is that AIM is fine for raising capital but the bourse lacks the level of retail investor interest which makes the TSX so attractive.

Whatever the reasons, Pan African has been marking time and the share, at current levels of around 5p, is sitting where it was 12 months ago.

Assuming all goes to plan then the largest shareholder in Pan African will be Shanduka Gold with 26% followed by Coronation Fund Managers with around 22%.