[miningmx.com] — SIMMER and Jack Mines (Simmers) has sold its mothballed Transvaal Gold Mining Estates (TGME) division for R25m to an unlisted company called Stonewall Mining.
The CEO of Stonewall is Lloyd Birrell, who was previously a long-term business associate of mining entrepreneur Peter Skeat but left to go into mining for himself in September last year.
Birrell worked with Skeat to set up the Ergo dump retreatment operation. This was sold to ASX-listed Mintails, but is now wholly owned by former joint venture partner DRDGold.
As Mintails ran into financial problems and was not able to continue funding its share of the development capital required, the company was forced to sell off increasing stakes in the Ergo project to DRDGold.
Birrell was at one stage a director of Mintails with board responsibility for the Ergo JV.
After Skeat bought the Agnes gold mine near Barberton in December 2008, Birrell initially ran the operation.
The Agnes mine has since been renamed Galaxy Gold, which Skeat is in the process of listing on the JSE. Skeat told Miningmx that he had no involvement in Stonewall Mining.
TGME controls a number of gold mines and projects in the Sabie and Pilgrim’s Rest regions of Mpumalanga, over which Simmers initially had high hopes.
In 2007 the company initiated an extensive drilling campaign, declaring it believed it had found a huge gold resource similar to the famous Carlin Trend in Nevada.
Simmers subsequently developed a heap leach operation in the area to recover gold from surface dump material.
The company also invested heavily in the mechanisation of the underground Frankfort mine, in the hope that it would reduce working costs to the point where it would be economically viable.
The exploration work did not pan out and the heap leach operation ran into extended delays because of environmental opposition to the granting of the required permits.
Operations at Frankfort were suspended in August 2009 because of mounting cash losses caused by soaring working costs.
The surface operations were put on care and maintenance at the end of 2009 because of delays in obtaining the required permits.
According to Simmers CEO Nico Schoeman, “the sale of TGME refines Simmers’ asset base in support of returning the company to profitability. The proceeds from disposal will assist in reducing our current debt obligations.’
Birrell could not be immediately reached for comment. He said in a statement released on the Stock Exchange News Service (Sens) that “we are very pleased to have secured TGME.
“Its operations are at the heart of South Africa’s eastern greenstone belt, which is enjoying enormous renewed interest from junior gold exploration and mining companies such as ourselves.’
