[miningmx.com] — Bernard Swanepoel’s Village Main Reef (Village) will soon ask shareholders for permission to raise up to R40m, needed to finalise the group’s acquisition of Consolidated Murchison (Cons Murch) and to bolster cash reserves.
“There is no sense of urgency, but I hope to get shareholder approval in December,’ Swanepoel told Miningmx.
Village announced in October it had entered into an agreement with major shareholder To The Point Specialists (TTP) to buy 74% of Cons Murch for R30m. According to the deal, Village also undertook to pump R20m into Cons Murch to fund further expansion of the mine.
“The R20m injection will also self fund all the mine’s future working capital requirements,’ said Swanepoel.
Cons Murch is a 1.3 million ounce equivalent gold deposit, which produces both gold and antimony. It was sold in September by Metorex to TTP, after the mine lost R79.2m in the year to end-June. The operation was previously described to Miningmx by a Metorex insider as a “non-core liability’.
Swanepoel said TTP (a group he also heads) has been operating Cons Murch for the past nine months, commencing while the mine was still under Metorex’s control.
“We’ve almost completed the turnaround,’ said Swanepoel. “It (Cons Murch) is now producing around 20 000 tonnes per month. If we can get it up to 22 000t, we’ll be making a little bit of profit.’ The facility’s current production forecast is 27 000t per month.
Swanepoel said the Cons Murch takeover would be typical of the type of future acquisition Village Main would pursue.
“We’re not constrained to being an exclusive platinum or gold producer,’ said Swanepoel. “We’ll take something with potential and do what needs to be done.
“There are many properties out there whose owners do not want to mine them any more. In different hands, those assets might be able to do a lot more.’
Said Village chief operational officer Dorian Wrigley: “We will also not fall in love with any of the assets we acquire. If someone else could do more, we’ll let it go if it turns out to be the best way of creating value for shareholders.’
Village’s second key asset is the Lesego Platinum project, which it acquired in June. The group announced in October it has completed the first phase of its bankable feasibility study.
“Successful completion of the scoping study milestone has been to the satisfaction of all the key stakeholders, including the Industrial Development Corporation which has committed R142m of funding for all three phases of the bankable feasibility study,’ the group said in an earlier statement.
“The second funding drawdown of R57m for the prefeasibility study has been issued and will commence in November 2010, with the total number of on-site drill rigs increasing to seven from four.’