[miningmx.com] — THE reverse takeover of Sentula by Shanduka Resources will bring a credible black economic empowerment (BEE) partner on board and will also improve profit margins, according to Sentula CEO Robin Berry.
Shanduka will acquire 51.9% control of the coal mining and services group through injecting its 30% stakes in Kangra Coal and Shanduka Coal into Sentula in a deal worth R2.1bn. The transaction should be concluded by August 31.
Berry told Miningmx: “We have always had the strategy of getting into our own mining operations in addition to the mining services and contracting business.
“In the contracting services business you are always a price taker. There are periods during which you can jack your prices up, but there’s always a lot of competition.
“This deal has been done on commercial terms and we needed a highly credible BEE partner like Shanduka because we have various coal assets for which we would not be granted mining licences without such a partner.’
Berry added he did not believe Sentula’s mining services and contracting operations would be cut back, because the group would do more of its own mining.
Sentula reported a drop in basic earnings to 6 cents per a share (previous financial year – 55.8c) for the year to end-March, although headline earnings rose to 16.1c (0.6c). A major financial feature of the 2010 results was the profit of R329m made on the disposal of an “equity-accounted associate’.
The company’s Nkomati Anthracite mine is expected to restart operations in the second half of the 2012 financial year, once environmental issues at the Madadeni open pit have been resolved.
The open pit operation was suspended in March and the underground operations at Nkomati were placed on care and maintenance from the end of May.
Berry said: “We need the open pit to be operating as well as the underground mine for the operation to be more than just marginally economic.’
Sentula has so far received R10m from the sequestrated estate of former director Jason Holland who – along with former director Casper Scharrighuisen – has been charged with misappropriating funds from the group in 2008.
So far Sentula has also won two civil judgments totalling R383m against Scharrighuisen, who estate was sequestrated on May 20 in the Western Cape High Court.
Berry said: “Both men are out of the country, with Holland believed to be in the UK. With the granting of the sequestration orders Sentula’s legal and forensic fees should reduce materially in the 2012 financial year.
“We have accounted fully against the losses so anything we get back is a bonus. We have taken these actions as far as we can as a company. The matters are now in the hands of the liquidators and the National Prosecuting Authority.”
