JOHANNESBURG (miningweekly.com) – The new controlling shareholder of the Orkney gold mine is expected to make an operational investment of between R300-million and R400-million to resuscitate the Orkney gold mine, which has been bought out of liquidation for R150-million, the head of the black economic-empowerment (BEE) consortium Elias Khumalo reports.

China African Precious Metals (CAPM), the new owner of the mine, has acquired Orkney gold mine from the joint provisional liquidators.

The new 74% shareholder of CAPM is Golden Haven Limited, a subsidiary of Shanghai Pengxin Group, which is injecting equity capital into the company.

The loan that CAPM got from Deutsche Bank has been repaid, which takes the previous 74% shareholder, Superb Gold, out of the picture, and the company does not expect to have to raise debt from banks in the near term.

“From a capital point of view, we’re looking okay at the moment,” BEK Holdings’ Khumalo comments to Mining Weekly Online.

The 26% stake in CAPM owned by BEE consortium BEK remains unchanged in the shareholder reshuffle.

CAPM is in the process of buying the nearby Buffelsfontein gold plant, which has not been used for several years, from the JSE-listed Village Main Reef.

At this early stage, it is also committing itself to the beneficiation of the gold that it mines and envisages, in the course of time, becoming a producer of gold jewellery items.

“We envisage going across the full gold spectrum of value addition and not stopping at the gold bullion stage, but it will take some time and considerable capital,” Khumalo tells Mining Weekly Online.

New main shareholder Golden Haven has placed funds in an escrow account ready for transfer to South Africa, following the payment of R150-million to the liquidators, 14% value-added tax on that to the South African Revenue Services and the lodging of a R17.5-million rehabilitation guarantee with the Department of Mineral Resources.

The South African Reserve Bank has granted the company permission to bring the money into South Africa, including funds for the upliftment of Section 54 of the Minerals and Petroleum Resources Development Act, which precludes the company from working the mine until danger zones have been identified, all damaged equipment has been repaired and a new certificate has been issued for continued operation.

Once that is dealt with, an assessment of the state of the underground workings and the need for dewatering is expected to take some six months, says Khumalo, who reports that CAPM is continuing to engage the two traditional labour unions at the Orkney mine, the National Union of Mineworkers and Solidarity, which have been given a commitment that the workforce will be recalled once operations resume.

Choosing any additional unions once operations resume will be left to the discretion of the workers, says Khumalo, who adds that the process of recalling the workforce has already partially begun.

The phased implementation plan at Orkney is being done in conjunction with studies that are under way by SRK Consulting, Minxcon Exploration Company and Agere Project Management.

He estimates that about 300 workers will be recalled in the first instance, building up eventually to between 2 000 and 3 000 when the mine returns to steady state.

Workers have been staying in the mine hostels and CAPM has been paying for water, electricity and sewerage costs.

CAPM’s previous 74% shareholder Superb Gold was a subsidiary of SSC Mandarin, but owing to internal reshuffling, Superb Gold sold all of its CAPM shares to Golden Haven.

Shanghai Pengxin is a private conglomerate with a diversified business scope in property development, urban infrastructure construction, high-technology investments and mining, which is an emerging sector of the ten-billion-RMB Pengxin group.

It has also acquired a majority interest in a copper deposit in the Democratic Republic of Congo.

Its board sees its South Africa mining investment as the first of many in Southern Africa.