Dear Confluence,
The JCI and Randgold mining group has been denied permission by the South African Government to move its primary listing and domicile to Toronto.
The group will continue to restructure which will involve Western Areas (a very big, very long life gold mine in which Placer Dome acquired a majority interest), Randgold & Exploration, Randgold Resources, Randfontein Estates (a big, low grade gold mine), Barnato Exploration, Free State Development and Investment Corp., JCI Gold and Consolidated African Mines.
The new JCI will have a gold output of about 1.3 million ounces per annum and will rank as the world's ninth largest gold producer and sixth in terms of gold reserves. Its main assets are in South Africa and Mali, West Africa.
Brett Kebble, CEO designate of the new company, has close connections with Placer Dome. Tokyo Sexwale, former premier of South Africa's Gauteng province, will be a director in addition to the people mentioned in Russett's posting.
The problem JCI encountered in South Africa was the black empowerment group whose chairman treated JCI as his personal fiefdom and made deals, without consulting his fellow directors, which on closer examination were more to his benefit than JCI's. He was forced to resign and the deals nullified but it left a bitter taste in the mouths of South African and London based investors.
North American and Australian gold companies have always enjoyed a higher rating than South African gold mining companies. This was due to the South African custom of listing each gold mine individually with resultant higher dividend yield expectations from investors as the company would go into liquidation once the gold reserves were depleted. A six to eight per cent dividend yield was not unusual and very high compared to Placer Dome for instance.
This situation has now changed but even so it is noteworthy that Anglogold, the world's largest gold producer, yields 5.4% and Goldfields of S.A. 4.9%. London listed and domiciled Anglo American Corporation, the parent company of Anglogold and Amplats (the world's largest PGM producer) with a finger in every metal and mineral pie imaginable yields 2.1% at its present, highest ever share price of œ38 (C$93).
As for Canadian companies migrating to London is concerned we are dealing with five juniors who cannot raise a cent in Canada. They need capital to continue exploration on very promising properties but the Canadian junior resource capital market is dead.
What is desperately needed is another big, good discovery and then the market will turnaround until that time the juniors will just convert into .com companies to survive.
So can you hardly compare the JCI group with these juniors.
Regards,
Crudestope. |
