Aurora concedes $2m funds “not enough”

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[miningmx.com] — AURORA Empowerment Systems said it had received $2m (R14.6m) in interim funding from Swiss investment firm Global Emerging Markets (GEM) – an amount it conceded was “not enough”.

The funds were received via a subscription option plan which effectively sees GEM take receipt of 20 million shares in Labat, a JSE-listed shell company that Aurora controls.

However, the funding is well short of the R50m Aurora said it hoped to receive several months ago, and will barely keep its two mines – Grootvlei and Orkney – running for a week.

Although the funds were “not enough’, Aurora’s commercial director, Thulani Ngubane, said that it was a commitment from GEM “which is better than nothing’.

Operating costs, including electricity, total R7.5m per month at Grootvlei mine while its costs R5m a month at Orkney.

“The shares were given to GEM at 65c per share’ with an aggregate subscription value of up to R725m, said Ngubane.

“Initially GEM had committed to R725m equity in Aurora, but there was too much pressure coming from the unions,’ said Ngubane.

The gold mining company is owned by President Jacob Zuma’s nephew Khulubuse and Zondwa Mandela, the grandson of former president Nelson Mandela.

Meetings with Unions to pay employees outstanding salaries would be arranged, the firm said.

Unions unconvinced

In an effort to make amends for a litany of problems at its mines, Aurora issued a statement with apologies to its stakeholders and employees.

Mandela, Aurora’s CEO, said: “We would also like to apologise to our work force for the delays and difficult period they have had to endure, and thank our comrade unions; NUM, Solidarity and UASA for their patience and tolerance. We hope to rectify our past mistakes and start a new chapter in Aurora with the support of our valued employees.’

Unions, though, were unconvinced by the company’s plans to bring employees up to speed with salaries and keep them employed.

National Union of Mineworkers’ spokesperson, Lesiba Seshoka, said Aurora had sung this tune before but workers at both of the company’s mines, Orkney and Grootvlei, ended up not being paid consistently for almost a year.

“This statement from Aurora is nothing new to us,’ said Seshoka. “I’ve got no reason to believe them because they have made promises before, but failed to deliver.’

Franz Stehring, the divisional manager at trade union UASA, said he had received the written statement from Aurora confirming its financial backing.

“This was the first time we ever received anything from Aurora in writing,’ said Stehring.

“At this point all that we are interested in is that if they did get the $2m they must pay our workers all that is due to them so that they can finally have food on the table,’ he said.

Seshoka maintained that “with Aurora seeing is believing’.

Aurora said it was still in negotiations with GEM to have more cash drawn down by the end of next month.

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