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Village main reef: tau lekoa gold mine not for sale by 123wert sdfsf
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Village main reef: tau lekoa gold mine not for sale |
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Business,Business News,Business Opportunities
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JOHANNESBURG - Village Main Reef's CEO is used to being in the position where hiscompany swoops in and snaps up struggling assets at a discount. Although not shy to admit that value would be taken off the tablefor shareholders if it can be found, Bernard Swanepoel now findshimself in the rather uncomfortable position of someone else tryingto acquire one of Village's main producing assets - its Tau Lekoamine - for what is perceived to be a hefty discount. "We are not selling Tau at that price, that is not our intention"confirmed Swanepoel in a telephonic interview today after thejunior gold producer released somewhat disappointing quarterlyresults in terms of lower volumes and grades (-13%) compared to theprevious quarter. Swanepoel is of the opinion that the R1bn (US$128 m) unsolicitedbinding offer made by Tannous Investment Group for the Tau Lekoamine undervalues what it is worth and would make for a speedypayback period for the buyers.
"The Tau mine makes us some R600m ($77m) profit per year. In theremaining four years of its life we've got high expectations ofthis mine. We've just spent a lot of money to make it perform evenbetter and we certainly don't get excited by a billion rand offer.I know that the market cap of our company is only R1.3bn ($166m)but we unashamedly think that Tau alone is worth a lot more andcertainly more than this offer" said Swanepoel. "Now everybody would love to buy a business that makes you R600mfor a billion rand but I mean that's not going to be..
you know welike to buy like that we don't like to sell like that" added theCEO. This isn't the first time an offer has been received and Swanepoelsays that the board will still jump through the hoops to see ifanything evolves. "Obviously when a board gets an unsolicited offer it applies itsmind. We previously had an offer, certainly from some of the sameindividuals involved, for R600 or R650m.
We indicated that thatwould certainly never be acceptable to us. This time the price ishigher and it's also in writing and claims to be a bindingoffer....we will however now appoint advisors and we will engagewith this entity, establish how credible they are, how good theyare for their offer, and see if there is sort of a sweet spot wherea deal is possible" Swanepoel says that he knows very little about the Tannous groupother than that he has been told that Mr Tannous is a well knowncar dealer in the Orkney/Klerksdorp area and that they do not ownany mines. "I think our mining industry, especially the gold mining industry,has been burned by non-mining people getting into mining and thatwould be one of many factors that the committee of the board wouldhave to consider if we were to agree that the price was acceptable,but we are not even there yet" said Swanepoel. Anthony Tannous, the CEO of the Tannous group, has said in aprevious discussion that he doesn't see this as an obstacle asmining expertise can be hired in. Tannous explained that gold mines needed entrepreneurship and truenationalisation that would see the local communities benefit,vowing to set up black economic empowerment trusts that would seelocals participate.
Having been born and bred in Orkney, theentrepreneur is passionate about the area. In Village's third quarter results the earnings per share and netcash flow more than halved to 7.19 cents and R73m respectively fromthe previous quarter. The share price jumped 7% to R1.67 in themorning on the news of the offer for the Tau operation but taperedoff to an increase of 5.77% in late afternoon trade. SUBSCRIBE to Mineweb.com's free daily newsletter now. I am Electrical Equipment & Supplies writer, reports some information about reusable cable ties , standard cable ties.
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