[miningmx.com] — FLUORSPAR producer Sallies is to reopen its Witkop Mine after receiving an $8m loan from new controlling shareholder Maghreb Minerals (Maghreb) and securing “sizeable’ orders from customers.
Sallies has been closed since June 2009 because of poor market conditions. The directors said at the time: “The future of Sallies is closely aligned to that of the world economy.
“Acid grade fluorspar pricing has begun to recover, but is still not at a level that justifies placing the mines back into production. Not only do prices need to recover further, but the continuing strength of the South African rand against particularly the US dollar is a further reason for not recommissioning the mines in the foreseeable future.’
The decision to start the Witkop mine up again also follows the strategy implemented by US hedge fund Firebird Management to consolidate its various fluorspar holdings under the control of AIM-listed Maghreb.
Firebird owns 56% of Maghreb and 67% of Sallies. In September last year, Maghreb bought 11.4% of Sallies from Honeywell International for $1.2m in cash while in December, Maghreb announced it would buy Firebird’s 67% stake in Sallies as well as Firebird’s holding of Sallies debentures.
Payment for both stakes will be in Maghreb equity, and an offer to Sallies minorities must be made by Maghreb because of the change of control.
Former Maghreb chairperson – well-known SA mining businessman Richard Linnell, who is also the chairperson of Coal of Africa – has stood down and been replaced by Firebird executive Nicholas Davidoff, the current Sallies chair.
Linnell will remain a director of Maghreb. He said: “London-listed Maghreb is viewed as a better vehicle to hold Firebird’s various international fluorspar interests.
“Firebird’s concept is to consolidate a meaningful chunk of the fluorspar business. A list of assets has been identified, but it would not be wise to identify them at this early stage.’
Firebird wanted to delist Sallies when it first took the company over, but was unable to do so because it did not manage to acquire 90% of the shares.
Linnell is non-committal over Maghreb’s intentions if it managed to increase its stake from the present level of 78.3% to 90%.
He said: “We have not decided what to do with the Sallies listing, but I would point out that the black empowerment shareholdings are at the level of the operating companies.’
Sallies financial director Patrick Cooke has been appointed acting CEO.
