[miningmx.com] — VILLAGE Main Reef’s two CEOs have in recent weeks been snapping up shares in the company on the open market as the stock continues to dither towards the lower end of its historical trading range.
Bernard Swanepoel has bought 499,820 shares in a series of nine transactions since March 15, at a price range of between R1.49 and R2.03 per share. Marius Saaiman, who was appointed joint-CEO at the beginning of May, has bought 200,000 shares in six transactions, in a range of between R1.50 and R1.99.
COO Dalu Ncube also got in on the action on May 16, buying himself 30,000 shares at R1.50 each.
Village Main Reef’s share price has been on a rollercoaster ride in the past twelve month, hitting a low of R1.07 following the finalisation of Simmer & Jack deal. It reached a 12-month high of R2.50 in January before returning to a range of between R1.30 and R1.60 since the middle of April.
The company has been involved in a series of corporate transactions since it became the vehicle of Swanepoel’s latest foray into the mining sector in 2010, acquiring marginal assets with the intention of turning those around. Swanepoel said, however, the company wouldn’t be hanging on to improved assets for too long, saying he would sell or seperately list those once a premium could be negotiated.
The standout transaction was the acquisition of Simmer & Jack’s interests in a R1.3bn deal announced December 2010. The company is also in the process of acquiring DRDGold’s Blyvooruitzicht mine for R150m.
Village is, however, yet to sell any assets, with management deeming a recent R1bn bid for Tau Lekoa (acquired in the Simmers deal) too low.
Analysts point to the fact that, at Village’s current market cap of R1.42bn, the share is going on the cheap, considering that Tau Lekoa alone has attracted interest at R1bn. Also, the company stands in line to receive around R400m from the dissolution of First Uranium, money which Swanepoel has said would be distributed by way of a special dividend.
One Johannesburg-based analyst told Miningmx Village’s shares were held back by the same negative sentiment which has guided the performance of South Africa’s listed gold sector in recent times, adding that management’s failure to hit production targets for two quarters in a row also didn’t help.
“But it shouldn’t be trading as low as this. If you take R1bn for Tau [Lekoa] and the First Uranium dividend then everything else will be for free,’ he said.
Imara SP Reid’s Percy Takunda said that while the market generally didn’t take a meaningful cue from directors dealings, it should be different for Village.
“Most companies are too big for directors dealings [to be of significance], but in this one they’re a significant player,’ Takunda said. He said the transactions of Swanepoel and Saaiman should provide a cue that they saw a lot more upside in the stock than the market was giving the company credit for.
