Dineo Faku
VILLAGE Main Reef was waiting for confirmation on funding by the Tannous Group, which made a R1 billion bid for its Tau Lekoa mine this month, Marius Saaiman, the joint chief executive, said yesterday.
Tau Lekoa hoists 90 000 tons of ore and produces 300kgs of gold a month. The mine was acquired last June from Simmer and Jack. The mine has a five-year lifespan. Tau Lekoa produced 865kgs of gold for the quarter to March and revenue at the mine was R364 million due to lower gold prices.
Saaiman said that the Village board was waiting for Tannous to provide proof of available funds for the deal and to know who the funders were. To date, no feedback in this regard had been received, he said.
“Most shareholders have largely ignored the offer as they, similar to the view expressed by the Village board, do not believe in the ability of Tannous to pay or conclude (the) deal”.
Last week, joint chief executive at Village Bernard Swanepoel, who transformed Harmony Gold from a single-mine operator into a leading mining house, said he did not know much about Tannous. He said Village needed to have confidence in the buyer’s balance sheet and its credulity to operate mines. The buyers needed to avoid a repeat of Aurora Empowerment Systems, he said.
Tannous, based in North West, comprises motoring, property, mining and fitness divisions.
Analysts have raised concerns that the group does not have the skills or experience to run a limited-life mine.
Tannous was one of 47 bidders for the Tau Lekoa mine in 2008, but it lost out to JSE-listed Village.
Anthony Tannous, the chief executive of the group, said yesterday that while he understood the concerns of shareholders, money for the deal was available and proof of funding would be produced soon. “We met with banks and funders. We have the funds, but we need to respect confidentiality of the funders,” said Tannous.
Swanepoel had said that an independent financial adviser was evaluating the offer. R1bn was insufficient, based on Tau Lekoa’s performance and potential.
“We have respect for Swanepoel as a mining engineer. Let’s wait until the due diligence (report) on the operation is completed to talk about the value of the mine,” Tannous said.