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Send  Share  RSS  Twitter  28 Sep 2009

VENTURES: From Groceries To Mining


Recent Western Cape Business News

RETAIL magnate Christo Wiese has enjoyed various business diversions over the last decade – including shifts into industrial products (via Invicta Holdings) and vehicle tracking technology (via Digicore).

But Wiese’s most famous coup – aside from his well-known ventures into retail via hugely successful Pep and Shoprite – was a dabble in the late nineties on a small West Coast diamond mining venture called Ocean Diamond Mining Holdings (ODM).

Wiese happened to have accumulated a fair sized strategic stake in ODM when Remgro controlled Trans Hex came a-calling – intent on buying out the small (but profitable) marine diamond mining company to bolster its own sea and share-based operations.

Trans Hex’s offer did not appeal to Wiese (and presumably some other staunch ODM shareholders), and when there was no prospect of an improved offer another bidder was wooed. This was Namco, which offered more than double Trans Hex’s price to take control of ODM.

Wiese made a fantastic turn on his investment, while Trans Hex were left high and dry on the marine mining front (and subsequently bought the less-than-successful Benco as an ultimately costly consolation). Namco went onto to stuff up not only the promising ODM, but its own operations as well (but that’s another story entirely).

Sadly Wiese could not repeat his success in resources with his latest fling on fluorspar miner Sallies. CBN notes reports that identified Wiese’s Titan Nominees as one of the big shareholders in Sallies that sold out their stakes to New York-based investment business, Firebird. Wiese backed Sallies through a number of rights issues, but ultimately the world economic doldrums saw Sallies forced to mothball its remaining Witkop mine just when the mine finally achieved operationally stability. Wiese appeared to have sold his Sallies stake at a sizeable loss, which probably lost him more than a few million rands on the venture.

Now after taking such a bath it would be reasonable to expect Wiese to steer well clear of commodities. Hardly. According to reports in the financial media, Wiese has bought a rather large strategic stake in White Water Resources (WWR) – a gold and heavy minerals exploration company based in Tokai.

WWR owns various gold deposits (including the old WitNigel) as well as a sizeable passive shareholding in GoldOne International (interestingly formed out of Sea Point based mining company, Sub-Nigel). But perhaps more interesting is that WWR has ownership of mineral sands concessions in the West Coast adjacent to Anglo American’s Namakwa Sands project.

This sounds like high risk stuff, which presumably comes with the potential for a high reward. So hopefully WWR is more of ODM and less of Sallies.

Then again things do need to be put into perspective. Wiese is in the fortunate position of having a significant shareholding in Shoprite, which notched up trading profits of (wait for it) almost R3 billion for the year to end June 2009.

Wiese’s share of Shoprite’s dividends for financial 2009 of 200c/share would be worth around R80 million, which is roughly equivalent to the market capitalisation of WWR.

Under these circumstances a flutter on gold and heavy minerals is just a little spice on top of Wiese’s meaty retail investments…

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