Steenkamp, who wasted no time giving credence to Pamodzi rsquo;s CEO reins to bottom-feeder specialist Peter Steenkamp, says that opportunity to become a million-ounce producer in two years.
Peter Steenkamp, who will take over as CEO on June 1, has an the process of buying from Harmony, but also many of is targeting and Harmony is wanting to exit.
Harmony, now the world rsquo;s fifth-largest gold-mining company, has begun moving away from its 3,5-g/t to 4,5-g/t assets and entrenching itself in higher quality space, which brings it closer to the likes of AngloGold Ashanti.
Simultaneously, Pamodzi is proving an enthusiastic buyer of lower-quality assets, using its 50,1% black control to confer black Another carrot Pamodzi dangles is royalty retention, allowing and 1,75% of the net smelter revenue from all the gold Orkney Of the seven Orkney shafts to be acquired, four are operative, namely the number four shaft, which is a large-volume long-life six-and-seven shaft, a combination shaft in which seven is the hoisting shaft; number two shaft, which is a high-grade producer with two more years rsquo; life; five shaft, whose barrel was destroyed four years ago in a seismic event; and number one shaft, a high-grade shaft that ceased when Harmony and ArmGold merged, but which has the potential to be reopened. These were formerly Vaal Reefs shafts, which AngloGold sold to Patrice Motsepe rsquo;s Steenkamp, who has worked at Orkney since 1988 for four different companies, led the team that achieved an 18-month R2,2-billion payback when Harmony acquired the assets from ArmGold.
Currently, Pamodzi is working to finalise the formal sale agreement and the legal due diligence study, which includes an environmental due diligence.
As the ore is to be toll-treated and there is no plant, Steenkamp expects environmental liability to be low.
However, Competition Com-mission and shareholder approval will have Pamodzi rsquo;s market capitalisation to some R1,4-billion.
Payment will be by a combination of debt and equity, Pamodzi Gold operations while keeping the overhead unchanged, which was the model Harmony used so successfully from 1995.
In his question at last week rsquo;s maiden quarterly presentation, hospital pass rdquo;. Steenkamp replied, however, that ldquo;on from a 7,5% BEE credit from the Orkney deal.
In addition, Pamodzi had selected its assets geographically to be in a position to play a consolidating role on the East Rand, the West Rand and soon also in the Orkney-Klerksdorp-Free State area, which would facilitate the million-ounce-by-2008 target.
With an estimated reserve of 150 000 oz, the Orkney assets had a appointment of new East Rand GM Graham Chamberlain.
The first-quarter yield of 660 kg was 240 kg below target, which the hedge proceeded to turn into a R5,4-million loss from a meagre Years of Mining, had left him with no illusions about the East quarter century of Elandsrand, Orkney and Anglo Base experience to work in the area.
ldquo;Even at 30% below expected gold output, the East Rand mine was profitable, so the opportunity is enormous if we can sort out the hedge.
We bought the East Rand operations because we believe that we can do something there. But I would concur that they are To achieve that, R15-million had been invested in the development and equipping of the old Cons Modder-located North West Shaft, which was scheduled to come into production by year-end.
In January, 1 500 additional personnel out of a total East Rand labour force of 4 500 were recruited.
While 710 kg was expected in the second quarter, nothing less than 900 kg a quarter would be satisfactory beyond that.
The Wits reefs, which will reduce the striping factor significantly as a result of being wider down to 3 000 m, are still being drilled and have still to be brought in.
Once full production is achieved a cost of R80 000/kg is expected, compared with the current R123 000/kg.
By the end of next year, when the Wits reef is included, it is expected that the West Rand will be producing at 45 kg a month, Pamodzi still had 160 550 oz of hedge outstanding, which had a market-to-market value of R404-milion. That was effectively a 52,2c loss a share, which was why the hedge was receiving intensive production dramatically, that went against the company rsquo;s philosophy of one operation carrying another.
From the funds raised on listing in December 2006, Pamodzi Gold shareholder loans, but the hedge was an inheritance that it had decided to retain.
means of partly or fully redeeming the hedge. If we have to maintain black control, we need to find people that will follow us Pamodzi Gold. We have had significant interest in trying to do exactly that.
We just need to come up with a structure that works for us and for Standard Bank and HVB, the owners of that Pamodzi Gold has two major shareholders, both of which were black controlled. An instrument was in place to raise funding, but Pamodzi Resources in order to maintain black control.
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