BERNARD
Swanepoel is bidding for control of JSE-listed shell
Village Main Reef Gold Mining (Village) in a move which
market observers reckon could be a precursor to M&A
activity by the former Harmony CEO.
Swanepoel announced today that his company, To the Point
Investments, had acquired 37.8% of Village at price of
46c a share from Harmony to which it paid R1m in total.
That follows the earlier acquisition of 10% of Village
Main in June at 100c a share costing R607,000 from a “Mr
Cobbett” who is described as “a long-standing
shareholder in Village” and who retains a 13% stake in
the company.
To the Point Investments now holds 47.8% of Village and
will make an offer to minorities at 100c a share to
acquire the rest of the company as required by the
Securities and Exchange Commission.
According to Swanepoel in a statement accompanying the
announcement, “we see a great opportunity to re-build
Village, incorporated in 1889 and listed in 1934, back
to some of its former glory.
“We are excited about making Village the “next
generation” resources company and look forward to
unlocking value for its current and future
shareholders.”
Interviewed today, Swanepoel commented he intended using
Village as, " a vehicle to play in the resource space.
It will not necessarily be a gold vehicle as I have seen
a lot of opportunities in other sectors such as coal and
platinum."
He added, "Village will also provide an opportunity to
small investors to play in the resources game. There are
plenty of unlisted platinum plays in SA at present but
it is impossible for a small investor with just a few
thousand rand to get into those.
"But maybe if Village ploughs R10m into buying a
material stake in one of those plays then small
investors can get exposure through Village."
Swanepoel added that he would looking at opportunities
in the rest of Africa as possible investments for
Village as well as in SA. He confirmed that Cobbett
intended staying invested in Village.
"I have already tried to buy more shares from him to get
above the 50% level but he won't sell me any more, " he
commented.
Swanepoel actually first bought the stake in Village
early last year when still CEO of Harmony. At the time
he was considering a number of options for the future
structure of Harmony.
One of them was to split Harmony into two separate
operations with the long-life, higher grade companies
grouped in one – dubbed “qualco” by analysts – and the
short-life, marginal operations in another - dubbed
“crapco” by analysts.
Village, it seemed, was destined to be Harmony’s
“crapco” but nothing happened in the run-up to
Swanepoel’s abrupt and unexpected resignation in August.
Since then, new CEO Graham Briggs has been following a
policy of disposing of a Harmony’s marginal assets with
a number of shafts being sold to Pamodzi Gold.
Suggestion in the market is that Swanepoel may be
revisiting the “crapco” concept for Village as soaring
rand gold prices re-invigorate prospects for the SA gold
industry while Harmony and AngloGold Ashanti have both
stated their intentions to dispose of further operations
considered “non core.”
Swanepoel resurfaced in January this year when he
revealed he had formed To The Point with partner Clinton
Halsey – whom he described as “one of a host of bright,
young people who have left Harmony over the past five
months. He’s a chartered accountant and looks after
corporate finance.”
To The Point is a consultancy intended to help companies
with their growth strategies.
Swanepoel said his business plan was to have four
clients – ideally three involved directly in mining and
one related to mining – which his consultancy could
help.
His clients so far include ASX-listed Mintails – which
is developing various gold and uranium dump retreatment
projects on the East and West Rand - and AIM-listed
Central African Mining and Exploration (Camec).
Camec is involved in base metal operations in the
Democratic Republic of Congo (DRC) and also intends
developing a platinum mine in Zimbabwe. Swanepoel is a
non-executive director of both Camec and Mintails.
Swanepoel told Miningmx at the time (Jan 23) that he
might also get involved directly in a mining operation
of his own once he had built up some capital.
He said, “the minerals business is booming and it seems
like anyone can make money at present. But that can
change. Some of the most interesting periods I had at
Harmony were during the tough times when people were
selling assets and we were buying them.
“That could happen again and you could say that’s my
dream for the future. I’m 46 and I reckon I am still
young enough to have a major innings ahead of me.”
Six months later Swanepoel’s predictions are already
coming true. Times have gotten markedly tougher for the
junior miners with share prices tumbling across the
board - Pamodzi Gold being a particular case in point.
The message from the Village acquisition seems clear
enough - Bernard’s back in the game.
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