[miningmx.com] — Johannesburg – Liquidators have warned the politically-connected Aurora Empowerment Systems to produce “sufficient, irreversible progress” on the Pamodzi mining deal by the end of May or face cancellation.
“At some stage, we will come to a point where we will have to draw a line and kick Aurora out,” one of the joint liquidators, Enver Motala, told Sapa.
“We have indicated to Aurora that we need proof of sufficient, irreversible progress from the Chinese company by the end of May. If that doesn’t happen, we have already indicated to Aurora that we reserve our rights to cancel the deal.”
Motala said the main creditors of the financially stricken Pamodzi gold mines in Orkney and Springs have said to liquidators that their patience with Aurora, whose directors include Nelson Mandela’s grandson Zondwa and President Jacob Zuma’s nephew Khulubuse, was running out.
The creditors are the Industrial Development Corporation and the Unicredit bank from Munich in Germany.
A high court earlier this year gave Aurora until August 16 to produce funding guarantees from a yet-to-be-named Chinese company interested in investing in Pamodzi.
“If by August 31 this deal is not finalised, Aurora will be out,” said Motala. “That’s the decision the liquidators have taken in consultation with the creditors.”
That was why Aurora had been warned to produce proof of progress by the end of May, he said.
But it seemed that the Chinese company was on board, said Motala. However, it still needed to get permission from its shareholders and the Chinese government to go ahead with the deal.
“PriceWaterhouseCoopers in China has been mandated to do a due diligence on the mines and draft a report for the Chinese company, its shareholders and the State Council… They are taking their time and investigating fully.
“I can tell you, if the Chinese come on board, we will be very happy. In Aurora’s hands on their own, we are sceptical,” said Motala.
In the meantime, about 200 miners at the Orkney and Springs operations are still living on the mines without an income.
Motala said between R2m and R4m was still owed in wages and salaries.
Aurora has made several claims in the past that funding had been secured to get mine operations back on track and pay outstanding wages.
Funders initially mentioned included a Malaysian funder AM Equity, which failed to materialise.
Then followed an unnamed North American private equity fund, which would allegedly have pushed $100m into the mine.
The Swiss funder GEM apparently agreed to release R50m of its pledged R750m to the liquidator by end-September, but that never materialised either.
Pamodzi Gold mine ran into financial difficulties in 2008 and, since then, many funding possibilities had fallen through.
Last year, Aurora announced it had secured enough funding to buy Pamodzi’s Grootvlei (Springs) and Orkney mines, which at that stage employed about 5 000 workers, from its liquidators.
But red tape and empty promises left the miners unpaid, while operations at the mines had ground to a halt.
Motala said there was a possibility of another buyer for the Orkney operations, but that it was too early to give more information.
