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Orkney operation to re-start

Pamodzi’s Orkney mine
– due to resume production
any day now
 
Johannesburg, South Africa — MININGREVIEW.COM — 15 April 2009 – Production from Pamodzi Gold Limited’s Orkney operations in South Africa are due to re-start this week, following the signing of an agreement between the mine’s liquidator and JIC Mining Services Limited.

“We are trying to rescue the Orkney situation,” SBT Trust Limited liquidator Enver Motala told Bloomberg News. “JIC – a mining services company based in Pretoria – will resume production on a staggered basis,” he said.

Lacking funding, Pamodzi had its Orkney operations placed into provisional liquidation on 20 March, when trading of its shares in Johannesburg was also suspended. The company’s East Rand and Free State units have since been placed into provisional judicial management.

About 1 200 Pamodzi workers at Orkney will return to work during the next four weeks, and all 2 800 employees are expected to be back by mid-July, according to Motala. Production from the mine was suspended because of Pamodzi’s funding shortfall.

“The initial liquidation deadline for Orkney has been moved back to April 17 to give Pamodzi more time to provide proof of funds,” Motala explained. “This deadline could be extended until May 26 if necessary,” he added.

“Pamodzi is trying to secure proof of funding from Best Rock Investments LLP, which has promised the company R200 million,” Motala said. “The company is also in talks with an unidentified party about a US$40 million (R360 million) loan,” he said, without providing further details.

Bloomberg News quotes Motala as saying that Pamodzi’s Orkney mine has liabilities of about R337 million, while both its Free State and East Rand operations have debts of about R300 million.

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