Johannesburg, July 1 (Reuters) - South Africa's New Mining Corp Ltd said on
Thursday it will acquire the non-gold mining assets of two South African
companies in a deal worth 350 million rand ($58.4 million).
New Mining will pick up various diamond interests and mineral rights from
Consolidated African Mines (CAM) and JCI Gold in a bid to become a niche player
in the global diamond industry.
"They will add critical mass to New Mining and provide it with a solid platform
for implementing its strategy of becoming a substantial and diversified
resources company," New Mining chairman Wiseman Nkuhlu said in a statement.
Under the deal, the black empowerment company will acquire CAM's 50 percent
stake in Guild Hall, an investment holding company which holds 34 percent of Gem
Diamond Corp.
New Mining will pick up mineral rights adjacent to Gem's Saxendrift mine in
South Africa, a 50 percent stake in the Letseng La-Terae diamond project in
Lesotho, and a stake in Mawenzi Resources.
New Mining will also acquire 100 percent of Ekusensi Resources, which holds 29
percent of DiamondWorks, a Toronto-listed company with prospects in Angola and
Sierra Leone.
The transaction will be settled through the issue of 330 million A and B
preference shares at 100 cents and 40 million ordinary shares at 50 cents each.
CAM and JCI Gold have indicated that they will place or otherwise dispose of the
ordinary shares they will receive.
New Mining's strategy is to create a niche in the high-value end of the gem
market with stones that can command between $650 and $850 per carat.
For JCI Gold and CAM, the asset sales represent another step in the
restructuring of South African former mining house JCI Ltd which collapsed last
year.
CAM said in a separate statement the New Mining transaction would set the scene
for a further restructuring of gold interests held by CAM, Western Areas,
Randfontein Estates, Randgold & Exploration and London-listed Randgold
Resources.
New Mining also announced its results for the year ended March 31, reporting
headline earnings of 2.4 cents per share compared to a loss of 1.8 cents per
share.
CAM reported an attributable profit of 132.5 million rand for the 12 months
ended March 31 compared to a loss of 178.6 million rand in the nine months ended
March 31, 1998.
CAM chief executive Brett Kebble said in a statement further restructuring
details would be announced shortly. |
