JOHANNESBURG (miningweekly.com) – The State-owned Industrial Development Corporation (IDC) had provided a R45-million loan for the provisionally liquidated Pamodzi Gold’s stricken Free State gold mine, lead provisional liquidator Enver Motala told Mining Weekly Online on Monday.
Motala said that provisional liquidators were also in the final stages of concluding a R40-million loan agreement with the HypoVereinsbank (HVB) of Germany, the holder of the onerous gold hedge over the East Rand operations.
He added that confirmation of the elusive Best Rock funding had, to date, still not been obtained.
As time was of the essence, the provisional liquidators had contizenith cone crushernued to explore other avenues, with firm takeover offers coming in from unnamed suitors for Pamodzi Gold’s President Steyn gold mine in the Free State and gold junior Simmer & Jack preparing to put in its bid on Monday for the takeover of the Orkney gold mine.
There was, at the time of going to press, still no news of offers for Pamodzi Gold’s problem child, Pamodzi Gold East Rand, where the hedge – the forward selling of ggold ore crusher separatorold – could present a liability of between R600-million and R800-million.
The JSE-listed White Water, which last month showed oblique interest in the East Rand operations, was still remaining mum when Mining Weekly Online called on Monday.
Motala told Mining Weekly Online that R23-milion of the total R45-million loan from the IDC loan had gone on paying outstanding salaries at President crushed ballast suppliers in nairobiSteyn and that the remaining R22-million would be used for care-and-maintenance of the President Steyn gold mine, which was no longer in operation.
This is the second IDC loan to Pamodzi-related business, the first being R200-million late last year, which was to have been joined by a matching R200-million from Best Rock, which has failed to arrive. The R200-million IDC loan was conditional on the Best Rock loan being paid, but that condition was never met.
Motala said that the joint provisional liquidators had received written offers for the Free State operations, but was under confidentiality not to reveal the names of the latest suitors.
“The offers are being seriously considered and, where appropriate, further negotiations with some of these parties is ongoing,” he added.
The potential R40-million from HBV would be used to stagger production on the East Rand, where proceeds of scaled-down gold sales were going towards salaries and environmental liabilities.
The liability of the Orkney mine has been established at R337-million and the liabilities of President Steyn gold mine in the Free State at R300-milion and the East Rand operations also at R300-million, excluding the hedge.
The hedge thus remains the poison chalice, and the current water-pumping costs at Grootvlei still a burden, despite the South African government’s granting of a R7,5-million water-pumping subsidy, which will amount to a R2,5-million monthly subsidy going forward.
Motala said that provisional liquidators had met with the National Union of Mineworkers (NUM), which represented some of the Pamodzi employees, where it was agreed that JIC Mining Services of Midrand would provide a comprehensive mine rescue plan for NUM’s consideration, which was furnished on April 28. “The joint provisional liquidators await NUM’s advice in this respect,“ Motala added.