Taung Gold International, a small Chinese gold mining
enterprise this is slowly constructing up a portfolio of antique and ignored
mines in South Africa, has made a suggestion to gather the Lily and Barbrook
mines in Mpumalanga.
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The mines belong to Vantage Goldfields and its related
subsidiaries, in large part the Makonjwaan Imperial Mining Company (Mimco).
Operations at both mines ceased some years in the past. A
main shaft collapsed at Lily in February 2016 and several employees died.
Previous tries to reopen the mine, and get better the bodies of 3 people
nonetheless trapped underneath tons of rocks, had been unsuccessful. Mining at
Barbrook became suspended due to financial considerations.
Partnership
Taung has partnered with Siyakhula Sonke Empowerment
Corporation (SSC) and will residence the two mines in a brand new business
enterprise owned through Taung and SSC if their offer is accepted.
SSC previously tried to gather the mines and had secured
R190 million in investment from the Industrial Development Corporation to
reopen them if its offer was a success. The transaction should but no longer be
completed because of criminal challenges from Vantage Goldfields, which
eventually skippered the deal regardless of SSC succeeding in overturning most
of the objections.
Both mines had been placed in business rescue at the start
of 2016 with little prospect of resuming operations below Vantage, which
regarded reluctant to spend a small fortune to reopen the small mines. Taung
declined to reveal its offer, however is apparently inclined to inject at least
any other R250 million to reopen the mines.
“The buy attention might best be disclosed as soon as very
last enterprise rescue plans are in area, optimistically in the next six to 8
weeks,” Taung said in reaction to queries. “The offer is to accumulate
Vantage’s shares in and claims against Barbrook, as well as the belongings of
Mimco.”
Taung will also make an offer to the secured and unsecured
lenders of the 2 mines. The belongings will all be housed in a brand new
company, with Taung and SSC as shareholders.
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Previous plans to reopen the mines referred to as for round
R250 million, of which maximum would be spent on the Lily mine. The first
precedence could be to behavior a seismic survey to get exact statistics
approximately the stableness of the area.
Lily would require a brand new incline shaft to get entry to
the mine, and most of the manufacturing regions will want to be reopened; most
of the plant infrastructure to crush ore and recover gold is still intact.
Barbrook does now not want plenty of work earlier than it can reopen as mining
ceased in keeping with plan rather than due to a coincidence.
Pockets and ‘strings’ of gold
The mineral rights and geological functions of the Lily and
Barbrook mines make for a totally interesting prospect. The gold deposits
within the Barberton vicinity are specific in SA in that they formed in wallet
and ‘strings’ in preference to in a long, flat reef as inside the Witwatersrand
basin.
Mines around Barberton are regarded for variable ore grades
and have historically mentioned big versions from one area to the subsequent.
As such, the mineral rights consist of loads of antique small mines,
traditional of small-scale traditional mining inside the location.
Promising
Nevertheless, Taung estimates that the mineral assets are
appealing and may be developed to provide as much as 50 000 ounces of gold in
step with annum. Prospects look promising below the belief of a stronger trend
in international gold fees and the decline inside the rand for the reason that
mines closed 3 years ago.
Taung couldn't provide a definite indication as to while the
mines will reopen or what number of mineworkers will get their jobs again (the
two mines hired greater than 1 000 people earlier than they closed down).
The organization has had little accurate information because
it acquired its SA pursuits and listed at the Hong Kong Stock Exchange in 2011.
The percentage became hit with the aid of what Taung has cited in its annual
reviews because the ‘Incident’, which ended in a suspension of the percentage
on the stock change for nearly two years.
The incident relates to the issuance of alternatives for 65
million shares, apparently without following right process. Most surprisingly,
the options had been issued with balloting rights as if the shares were already
issued.
Taung’s existing South African projects
Taung secured the mineral rights to components of the
vintage Evander gold mine as well as a prospecting right to the Jeanette
exploration mission close to Harmony’s Target Gold Mine inside the Free State a
few years in the past.
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However, neither of those tasks is in production but.
Progress has been sluggish despite Taung’s optimism with reference to their
potential and estimates of huge and worthwhile ore reserves.
Taung obtained full hobby in Evander in 2010 and will only
control the switch of the mining rights by way of 2013. It spent every other
three years on a feasibility have a look at and is still too comfortable
funding of round $580 million to in addition broaden the mine.
The Jeanette venture turned into obtained from Harmony in
2008 and the prospecting right changed into best transferred to Taung in the
direction of the quilt of 2013. A feasibility observe changed into completed in
2016 and the prospecting proper became converted to mining rights in December
2017. Taung desires to elevate at least $750 million to get the challenge
started out.
Barbrook probable to be first precedence
Taung’s modern financial statements resemble those of an
exploration enterprise rather than a mining difficulty, with the balance sheet
ruled through mineral property but very little cash.
The income statement displays prices to broaden tasks,
however no operational profits.
Flashing a Barbrook gold bar at the Hong Kong inventory
trade buying and selling floor will assist improve capital for Evander,
Jeanette and Lily – and push Taung closer to mining the gold it had set its
mind to in 2010.
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