Western Cape Business News

Send  Share  RSS  Twitter  19 May 2009

VENTURES: Not Actually Cute And Cuddly


Recent Western Cape Business News

THE controversy around the non-performance of West Coast diamond miner Wealth 4U Mining & Exploration has hardly died down, and already we have another small entity trying its luck.

Interestingly, Panda Marine Diamond and Exploration – a self proclaimed ‘bottom end’ junior diamond mining and exploration company - is at pains to distance itself from the infamous Wealth 4U.

Panda’s website proclaims: “Panda Marine Mining and Exploration Limited wish to point out that NO relationship exists between Panda Marine and a company or companies named Wealth4U or W4U.”

Panda apparently “is the owner and developer of marine mining technology comprising submersible robotics and processing equipment for the harvesting of marine diamonds.” CBN wonders whether this robotic equipment is similar to that mooted by Namco in its (brief) heyday as king of the sea diamond miners in the late nineties?

But it seems Panda is not only about technology. The company also owns marine mining rights – which supposedly span from Saldanha Bay to Alexander Bay – including the Namaqualand and Richtersveld regions.

Now that’s a big area of operations, and one would naturally expect the company to be ‘big’ on details around these concessions. But there’s nary a detailed mention of specific mining areas on the group’s website, which precludes anyone making a judgement call on the operational merits of Panda.

CBN, however, managed to locate a press release from late 2007 that suggested Panda Marine obtained prospecting rights under contract from its founder and CEO Kobus Pansegrouw.

The release stated that Pansegrouw was awarded prospecting rights in terms of section 17(1) of the Minerals and Petroleum Resources Development Act, 2002 (Act 28 of 2002) (MPRDA) during August 2006. Execution of the Right was delayed due to a heavy workload at the Department of Minerals and Energy. Panda Marine had been on site since January 2007.

The prospecting area consists of approximately 118 square kilometres of sea bed, situated opposite the Groen River mouth on the SA West Coast.

Holding concession rights is one thing. Getting the diamonds out profitably is quite another…as history has shown time and time again.

From what CBN can ascertain Panda and Pansegrouw appears to have its genesis in supplying engineering services to marine diamond miners.

Panda, itself, is not exactly steeped in history

It seems Pansegrouw started out in 1984 as an engineering design and drawings specialist. This morphed into Pansegrouw & Associates in 1993, and the company was registered as a private company in 2002.

In 2007 Pansegrouw & Associates was converted into a public company in the form of Panda Mining. The group’s website suggests future plans include listing on either the Alternative Exchange Market in London, the Toronto Stock Exchange or the JSE’s AltX.

Panda’s website contains a presentation entitled “The rugget (sic) beauty of the West Coast Namaqualand and the West Coast”, which can be hardly regarded as illuminating.

Other than a gallery of generic shots of the West Coast and mining activity there is no nitty gritty information provided on operations or exploration.

No financial statements are provided on the website either – which is a bit of an oversight for a company with ambitions to list on major international bourses. The current ownership structure of Panda is also not disclosed – although CBN presumes Pansegrouw is the major shareholder.

There is some detail on Panda Marine Engineering, but nothing specific on submersible mining machinery and processing equipment for sub-sea diamond mining.

The website does claim, though, that Panda’s design philosophy “provides a technical solution to marine diamond mining that fits between the high capital operations of De Beers and the diving operations of the traditional West Coast miners”.

The website reckons the equipment was designed to replace the diver with a submersible machine that can operate at deeper depths for longer hours and at a lower capital cost than the larger operators.

This – as we have pointed out earlier – is nothing new as the technique was used (with mixed results, we may add) by Namco in the early nineties.

Panda says the submersible technology is not for sale, but will be made available to other parties on a joint venture basis.

One presumes that with listing ambitions, Panda will soon need to tap the public for participation and probably funding. So far there is no indication that Panda is selling or offering shares to the public – but the website certainly provides a strong hint that such an exercise is imminent by highlighting tax breaks on venture capital investments.

While Panda has gone out of its way to distance itself from the controversial W4U, the lingering scepticism over small marine diamond ventures will probably linger until Pansegrouw can produce either a prospectus or audited financial statements signed off by reputable auditors and corporate advisors.

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