Peter Skeat’s project to re-open the former Blyvooruitzicht (Blyvoor) gold mine should finally get the green light in January after a string of funding set-backs during 2017 which have delayed the start-up since May.
That was the original target set by Skeat in November 2016 but he – wisely – qualified his forecast at the time he made it stating it was “subject to no adverse political developments taking place.” The past year has been one of non-stop political set-backs for South Africa resulting in a string of investment ratings downgrades which have played havoc with Skeat’s foreign fund-raising efforts.
He told Miningmx, “ we had the funding lined up three times and then lost it three times because of the political situation in South Africa. Overseas investors that we approached typically gave us 10 out of 10 for the project but one or two out of 10 for the country risk.”
That forced a major rethink on strategy. Skeat has now approached the Industrial Development Corporation to come in as a key domestic investor providing 50% of the funds still required while he has lined up foreign investors for the balance.
He has also changed the development scope of Blyvoor Gold which had initially looked at developing two projects – one surface and one underground – in tandem.
Skeat commented, “ we have now decided to go for just one project initially and we assessed the underground mining project as being the more attractive for foreign investors.”
He added the funding required amounted to another $62m (about R800m) in addition to the R350m that has already been invested at Blyvoor. All going to plan the financing should be signed off in January after which construction will start targeting a first gold pour in October/November.
Skeat noted the production start-up could be pushed out to January/February 2019 depending on how well the mine construction goes along with the provision of infrastructure such as a new Eskom power line.
“It’s nearly all in place bar the funding. We have the mining licence. We can start operations using the old EMP (environmental management plan) while applying for a new one and we have good relationships with the local community whom we have brought on board as our BEE partner through a Trust.”