[miningmx.com] – ADAM Fleming, chairperson of Witwatersrand Consolidated Gold Resources (Wits Gold), would reinvest his family’s proceeds from the R406m sale of Wits Gold in the company’s buyer, Sibanye Gold, adding that its CEO, Neal Froneman, would consolidate South Africa’s gold sector.
“It’s a tiny investment against the size of that company, but I believe Neal has the energy and the power to do the ultimate consolidation of South Africa’s gold industry,’ said Fleming in a telephonic interview with Miningmx.
Fleming held about 26% of Wits Gold – worth about R100m – which yesterday confirmed it had signed a term sheet for the sale of the company to Sibanye Gold for R406m in cash.
The offer represented a 41% premium to Wits Gold’s 30-day weighted average price and brings the curtain down on Wits Gold’s 10-year history, seven of them listed on the JSE.
The last two years have seen a harrowing decline in Wits Gold’s share price, however. The stock once traded at R94/share giving it a market value of over R3bn as investors took a shine to its position as a proxy on the gold price.
More lately, however, Fleming attempted to turn Wits Gold into a gold miner after investors turned their back on the company. “The market just wasn’t there to support us,’ said Fleming, who added that exchange traded funds had become the de facto gold proxy while investors also became “gloomy’ about South Africa.
He insisted, however, that South Africa would once again attract major gold investment. “It’s where the gold is. AngloGold is doing some exciting things with technology, but it will take time,’ said Fleming.
He was also positive about gold stocks as long as they provided yield. “I think investors will be persuaded to buy gold stocks again as they will get money out with their yield,’ he said.
He also backed gold to make a comeback. Fleming corrected forecast the recovery and subsequent bull run in the gold price in 2006 when he said the market was “in the foothills’ of a recovery.
Commenting on future investment plans, Fleming said he preferred to let the dust settle, but added that he could become active in the South African gold market.
“I would love to give it another crack of the whip. Perhaps as an investor or an incubator of another baby. I don’t know,’ he said.
