JOHANNESBURG (miningweekly.com) – It's been an irritating marathon dispute in which minority shareholders of mining companies JCI and Randgold & Exploration (R&E) have had to be ultra patient as the bigger fish negotiated terms.
But, finally, in the early hours of last Thursday, those bigger fish settled, unlocking close to R1-billion for R&E shareholders alone and setting off new horizons for both JCI and R&E, which have been suspended on the JSE.
Although the deal has still to be put to shareholders, it looks set to go through.
Both JCI and R&E formerly operated under the leadership of the controversial, deceased mining magnate, Brett Kebble.
R&E CEO Marais Steyn told Mining Weekly Online that the resolution of the dispute would result in assets of between R900-million and R1-billion flowing directly to R&E shareholders and that a R&E mining business could now be built on R&E's strengthened range of prospecting rights.
JCI CEO Peter Gray spoke of all sides in the dispute facing a fairly equitable outcome.
Key shareholder, Monty Koppel, representing Letseng Diamonds, who previously refused the terms offered, told Mining Weekly Online that he had already gathered in many signatures to support the deal.
But Koppel would like restraint in the many legal actions still on the cards and lamented that JCI and R&E had already spent "many millions of rands" in legal expenses and should avoid spending too much more.
"The parties need to examine every action and, in the interests of shareholders, must take a principled view and terminate unnecessary proceedings, so as not to prejudice shareholders.
"Letseng agreed to the settlement of the main action because it was very costly for all parties, and we've saved quite a lot of money, as an action between the two parties would have been lengthy and extremely costly for both. The only losers in the end would have been the shareholders. There was also a material reduction in the Investec fees," Koppel added.
The settlement agreement gives rise to JCI being discharged from R&E's claims against it and vice versa. But several other legal actions are still pending.
Of his undertaking to obtain supporting signatories, Koppel added that a number of the signatories had already executed the necessary documentation and the outstanding signatories had indicated that they would execute the agreements as well.
Gray told Mining Weekly Online that JCI was likely to cease being mining listed company.
"The assets are predominantly property with a substantial Boschendal stake, and property may be the direction in which we go, but that will have to be put to shareholders first," Gray said.
Further, there was potentially cash from Xelexwa, the holder of Vulisango's empowerment shares in gold-mining company Simmer & Jack Mines.
R&E had liquid assets of between R250-million and R300-million; Gold Fields shares worth R200-million, a range of mainly gold prospecting rights that might be developed with other parties, as well as legal claims, on which there might be good news for shareholders "in the short term".
Steyn said that R&E had increased its shareholding in Freddies to 85%, which had augmented the company's gold prospecting interests.
The JSE was being approached to lift the suspension of the R&E share and enable it to trade again.
"We would like to be seen as a mining company open for mining business," Steyn said.
In R&E's favour from a trading perspective was its relatively diverse shareholder base inherited from the Kebble era.
One of R&E's main concerns was that JCI had not made any financial information available since October 2008.
As R&E would be distributing JCI shares, R&E shareholders needed JCI to make its financial position public as soon as possible.
The settlement, R&E said, involved the issuing of 1,55-billion new JCI shares, representing 44% of the company's total number; and the unbundling of 305-million JCI shares, representing 8,5%.
The R&E board remained committed to a "pragmatic and commercial approach" to the recovery of assets allegedly misappropriated.
The JCI/R&E settlement is not only conditional on R&E and JCI shareholder approval but also on regulatory approval.
The terms of the revised settlement agreement will be detailed in a further announcement.
The parties have procured irrevocable undertakings from key shareholders.
To listen to an audio clip on the JCI/R&E/Investec/Letseng settlement, go to www.miningweekly.com and click on 'Multimedia' and then on 'Audio Clips'