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Send  Share  RSS  Twitter  04 Jul 2011

VENTURES: From Cape To China...and R3bn Later

 



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IT’S easy to be disparaging about Cape-based mining companies with the JSE littered with numerous fizzled projects (Benco, Regional Resources, Dalsig Mining, Union Mines, Kimberley Consolidated Mining etc).

But with that in mind CBN thought it might be informative to trace the journey of one the Cape’s most successful mining ventures – particularly because the company’s success may not be that evident after a slew of deal-making over the last decade.

Interestingly the company in question was not a diamond miner (as so many Cape mining companies are), but rather owned several gold mining interests. The company in question was Sub-Nigel, which back in the late nineties quietly managed several dormant gold mines from its Sea Point headquarters (yes Sea Point!).

In 2000 (when the bullion price was less than inspiring) Sub-Nigel – headed by Les Holmes – held a market value of less than R5 million on the JSE.

As gold slowly returned to favour Sub-Nigel – long regarded as a no-hoper – it started to attract attention, especially its East Rand assets that included assets like Spaarwater and Sub Nigel and a Free State-based gold asset in the form of Ventersburg.

In 2005 the long awaited deal transpired when junior gold and uranium miner Aflease – which owned the attractive Modder East Gold Mine on the East Rand - bought control of Sub-Nigel.

Later in 2005 Southern Cross Resources merged with Aflease to form SRX Gold and Uranium, which eventually was split into Uranium One and Aflease Gold.

Aflease Gold became GoldOne International in 2008, and – as CBN has reported before – attracted the attentions of retail tycoon Christo Wiese (who is now a significant shareholder).

Last year GoldOne further refined itself in a deal with White Water Resources, another junior gold mining company with its headquarters in Cape Town’s southern suburbs.

The deal saw GoldOne injecting some of the Sub-Nigel assets into White Water Resources (in exchange for a controlling shareholding), and the formation of a new look company called Goliath Gold Mining.

The cherry on top came only last month when GoldOne International was targeted in a buyout by a group of Chinese investors (Gee, we wonder if Mr Wiese will be selling his stake?) – offering a premium priced deal that bears testimony to the quality of the company’s gold mining assets.

What we have today (remembering that in 2000 Sub Nigel carried a market value of less than R5 million) is GoldOne International with a market capitalisation of almost R3 billion and Goliath Gold with a market value of over R150 million.

Maybe we should think again when generalising about the virtues of Cape-owned mining assets?


 
 
 
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