[miningmx] — NEAL Froneman’s Gold One International and Goliath Gold confirmed on
Wednesday the companies would acquire the liquidated Pamodzi Gold’s East Rand
assets – Grootvlei and surrounding areas – for R70m.
The deal was struck with the joint provisional liquidators of Pamodzi Gold’s assets,
with the purchase price significantly lower than the R390m agreed to in
October 2009 by the liquidators and Aurora Empowerment Systems.
According to Froneman, CEO of both Gold One and Goliath, the rationale for the
transaction centres largely on the companies acquiring the consolidated assets for
prospecting purposes, with the view to extend the life of Gold One’s flagship Modder
East mine and to develop new gold mines.
Gold One would contribute R65m to the deal in return for areas that are immediately
down-dip and contiguous to Modder East.
“This down-dip extension has the potential to substantially increase Modder East’s
current mine-life of 10 years,’ read a joint Gold One/Goliath Gold statement.
“Furthermore, this asset can be accessed utilising Modder East’s existing
infrastructure, and remains disconnected from the flooded historical mine voids.’
The strategy is similar to how Gold One went about the acquisition of the property
Modder East, an operation mined since the 1920s. Although Modder East was well
worked, Gold One mines its secondary black reef, which it accessed only after having
built new infrastructure.
“Gold One intends confirming this down-dip extension through a surface exploration
drilling programme,’ read the statement. In addition, Gold One is also gaining
selected surface assets from Grootvlei, including the general offices and the
Grootvlei Number 4 Shaft complex, which include the historical gold treatment plant.
“These areas are considered to have significant strategic value in the event that
new mining operations commence,’ said Gold One. “Options exist to undertake either
the refurbishment of the gold plant or, alternatively, to construct a new plant on a
historically disturbed site.’
Goliath Gold would contribute R5m in return for prospecting rights over the remaining
assets. It would also acquire the historical mining and geological data of the area
from the liquidators.
NO MINING RIGHTS
Froneman said key to the transaction was the fact that Gold One and Goliath would
not ask for the conversion of the existing mining rights over the properties, but
instead apply for new prospecting rights.
This way, Gold One and Goliath would not be held liable for any historical
environmental liabilities, or obligations related to water pumping and acid mine
drainage.
“The opportunity to explore and develop such assets without the associated legacy
of pumping and environmental liabilities is critical to the successful execution of Gold
One and Goliath Gold’s strategy to extending the life of gold mining in the East
Rand.’
At a presentation to journalists and analysts about the particulars of the deal,
Froneman said issues regarding the property’s environmental legacy have been
thoroughly discussed with the relevant authorities.
“There is a recognition that this is a historical matter that has not been properly
managed by authorities at the time,’ he said. “We’ll only assume those liabilities that
we create.’
Froneman said he thought the asset held the potential of three or four more “clones’
of Modder East.
“The shallow reef has never been explored in a systematic way,’ he said, warning
however that no new development was expected to be announced soon.
“We’re not taking these assets into production in the short-term,’ he said. “It’s going
to take three to four years before we can push any buttons.’
