RIGEL Resource Acquisition Corporation, a New York-listed ‘blank-check’ company was in talks to combine with South African gold miner Blyvooruitzicht Gold Mining (Blyvoor Gold), said Bloomberg News citing “people with knowledge of the matter”.
Blyvoor Gold CEO Richard Floyd declined to comment on the speculation which stated the deal could value Blyvoor Gold at as much as $425m.
The blank check company, backed by Orion Resource Partners, a money manager with $8.5bn of assets, hired Citigroup Inc. and Rand Merchant Bank to do a pre-sale and raise about $60m early in 2024, said Bloomberg citing its sources.
Speaking at a conference in June, Blyvoor Gold chair Alan Smith said the company had “corporate activity in our near term future. What that ends up being I’m not too sure, but when you borrow money from these funders globally they look for a near term exit.
“So it is on our horizon.”
Smith said the mine was operating at a run-rate of 100,000 ounces of gold a year. There were aspirations to increase that output to 200,000 oz/year, he said.
If the transaction with Rigel Resource materialised it would represent an extraordinary turnaround in the fortunes of the mine. Established in 1937 and producing its first gold in 1942, Blyvooruitzicht is a storied asset in South Africa’s gold mining industry.
It was the richest orebody in the West Wits line of gold discoveries but fell into disrepair when closed by Village Main Reef leaving thousands of employees facing poverty. The mine was plundered by thieves until it was bought out of liquidation by the late Peter Skeat, a renowned gold industry entrepreneur.
The mine was completely re-equipped and despite the hiatus of Covid-19 lockdowns resumed production of about 30,000 oz/year in 2021.