SOUTH African investors can expect a new resource listing, with one of the assets within the new group being the Orkney gold mines Aurora Empowerment Systems is buying from provisional liquidators for R215m.

Aurora, which counts as its directors two men of the most politically connected families in the country, will invest a further R150m in Orkney to bring production up to 250kg/month, with the first target of 200kg/month of gold set for April 2010.
Aurora is headed by anti-apartheid icon Nelson Mandela’s grandson Zondwa as managing dirctor and Khulubuse Zuma, the nephew of ruling president Jacob Zuma, as chairman. Michael


Hulley, who worked as Jacob Zuma’s lawyer is a non-executive director of the company.
Also on the board as an executive director is Raja Dato’ Zainal Alam Shah, a Malaysian who has a strong banking background. He is affiliated with a private equity fund called Am, which is underwriting Aurora’s resources ambitions.

The upfront funding comprises R15m cash and the balance of R200m to be raised via a rights issue underwritten by the Kuala Lumpur-based Am. The second tranche of R150m has been arranged by Am and this would mean the Malaysian fund taking an unspecified stake in the company, said Mandela.

Mandela said the plan was to shortly list a resources company focused on precious metals and diamonds on the JSE and that the Orkney assets would be housed in that vehicle. He gave no further details.
The market can expect in the identity of the proposed company, the listing time line and its assets within 10 days.

Louis Bezuidenhout, who has worked as general manager at Orkney since March this year, said the mine would break even at production of around 190kg/month of gold at a metal price of R240,000/kg.
Of the R150m, half would be spent over the first year of operations on developing the mine, including developments at the seven and four shafts, he said.
Orkney’s provisional liquidators are urging Aurora to start mining soon under their supervision. Bezuidenhout said the deeper portion of Two Shaft had deteriorated badly since the mine was put into care and maintenance in March this year. The shallower portions of the mine were in acceptable condition, he said.

The transaction is conditional on the preferred creditor, the Industrial Development Corporation (IDC) giving its approval. The unions have backed the proposal.
The liquidators say plans by Pamodzi Gold management to secure R626m in funding from the China Africa Development Fund will not derail the sale of Orkney nor the sale of Pamodzi's Free State assets to Harmony Gold.

There are four bidders for the remaining East Rand assets. Aurora is being persuaded by the provisional liquidators to put in a bid for those mines too, said Enver Motala, one of the liquidators.