PAMODZI LINING UP HARMONY SHAFTS
IT WILL BE WORTH keeping an eye on the ever-enterprising Harmony Gold over the next month or so. Deal junkie Bernard Swanepoel, the company’s creative CEO, is at it again with plans to sell off the company’s marginal mines from which he now struggles to make money.
Swanepoel won’t comment directly on new plans for his old strategy. “At the right price, less strategic shorter life assets will be up for sale. But such a process would be subject to a full due diligence,” he says, indicating the sale of marginal ounces will be neither quick nor easy. However, speculation is that Harmony’s Orkney shafts, situated near Klerksdorp, are being prepared for Pamodzi Gold.
Pamodzi is a newly listed gold junior with plans to become a 400 000oz/year producer by the end of this year. It certainly needs the gold from Orkney after owing up earlier this month to development problems at its Petrex mines on the East Rand. A debilitating hedge book, which Pamodzi is attempting to dissolve, is compounding the redevelopment of those mines.
“Did we realise the extent of development we’d need to catch up on? No, but we’re working on that and we will bring it right,” Pamodzi CEO Ken Steenkamp told Miningmx on 13 April. Pamodzi forecast 169 000oz this year from its Petrex mines, bought from Canadian firm Bema Gold last year.
Swanepoel declined to confirm whether the Orkney shafts (Numbers 2, 4 and 7) are heading to Pamodzi Gold.
If Pamodzi is in for Harmony’s Orkney shafts, it’ll be a massive coup for the gold junior. The shafts yielded about 162 000oz last year, enough to take Pamodzi towards its magic 400 000oz/ year target.
Yet there are problems. According to one market commentator, the shafts are diamonds one month and a dog’s dinner the next. They produced profit of R54,1m in the December quarter, a vast improvement on the R7m in the end-September quarter.
We’ll bring it right. Ken Steenkamp