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Aurora destined to be major gold player – Zondwa Mandela
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14th October 2009
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JOHANNESBURG ( – The soon-to-be-listed Aurora Empowerment Systems was destined to be a major gold player, Zondwa Mandela, Nelson Mandela's grandson, said on Wednesday as he clinched another significant gold acquisition and revealed, under questioning, that he had two more gold assets in tow.

"We do view ourselves as being a major player in gold in a few years. For as long as we manage our operations correctly, nothing will stop us from competing with the top gold-mining companies in the country," Mandela, 26, told Mining Weekly Online.

Aurora's chairperson is Khulubuse Zuma, nephew of President Jacob Zuma.

He said Aurora would imminently be on site at Pamodzi Gold East Rand, after buying the liquidated gold assets for R390-million.

As with Aurora's R215-million acquisition of Pamodzi Gold Orkney, there would be no retrenchments at Pamodzi Gold East Rand, where 1 600 employees would go back to work as soon as possible under new Aurora management, and where the full 3 800 would be re-employed in due course.

Mandela told Mining Weekly Online that Aurora had also acquired the Primrose Gold Mines, the CEO of which, Keith Hart, was present at the media conference to announce Aurora's acquisition of Pamodzi Gold East Rand.

The company was also talking to JSE-listed White Water about a possible joint venture with its Nigel gold assets.

Aurora consultant Dawid Stander told Mining Weekly Online that the major advantage on Pamodzi Gold East Rand was that it had its own gold plant, whereas Aurora was having to make use of the gold plants of AngloGold Ashanti and Simmer & Jack at Orkney to toll treat the gold ore that it mined.

Aurora intended investing R40-million to revamp the modern East Rand gold plant and was studying alternative gold plant options at Orkney.

The liquidators have kept a skeleton staff to keep the East Rand surface operations ticking over for handing over to Aurora this week.

"The R390-million received for Pamodzi Gold East Rand assets has surpassed all our expectations," lead liquidator Enver Motala told Mining Weekly Online.

Motala reported that, with the R405-million obtained from Harmony Gold for Pamodzi Gold Free State, the liquidators had obtained a total of R1 060-million for all the assets.

What the concurrent creditors receive from the liquidators would, he told Mining Weekly Online, depend on the amounts for which the secured creditors would be prepared to settle.

On the East Rand, the German HypoVereinsBank (HPV) had already accepted a compromise deal, involving R190-million from Aurora over a period of 57 months in payments of R10-million a quarter.

"What we have is R200-million for distribution on the East Rand; R15-million to be allocated for payment to postliquidation service providers.

"All of the salaries and wages have been paid, and there are now sufficient funds to take care of the medical aid and other third-party payments as well.

"We have advised Aurora to structure the deal so that at least R20-million goes to concurrent creditors on the East Rand to provide an incentive to vote for a 311 offer of compromise," he added.

Of the R165-million remaining, HPV would receive the R50-million lent to the East Rand after the liquidation, and another R50-million as a preliquidation dividend.

At Orkney and in the Free State, the sole secured creditor is the State-owned Industrial Development Corporation (IDC), which had an indebtedness of R300-million with interest.

"At Orkney, the concurrent creditors could be very fortunate in receiving a dividend of up to 93c in the rand, depending on the dividend paid to the IDC, " Motala said.

He anticipates about 40c in the rand for the Free State creditors, after the IDC has been paid.

Should Aurora opt for a Section 311 arrangement, which it did at Orkney, HPV would also receive the R50-million it lent to the cash-strapped East Rand operations as a first charge, and a further R50-million dividend.


Edited by: Creamer Media Reporter


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Aurora MD Zondwa Mandela tells Mining Weekly Online’s Martin Creamer that his soon-to-be-listed gold company is in growth mode. Cameraperson: Nicholas Boyd. Video Editor: Darlene Creamer.
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