Marsfontein: the Emerging Truth
Hello Vaughn (and Infoman) and SUF investors
I'm an individual investor, who has followed this thread for months. I see from Vaughn's posting that some facts are finally being researched by investors and coming to light. I have spent a good deal of time researching Marsfontein; before that I had done the usual (thorough) background research that you would expect from someone investing in a junior mining company. The following is verifiable public information:
I first enquired from Southernera why they didn't issue an official press release dealing with information from "Infoman's" posting which appeared on this site, and which was later published in Business Day in South Africa. I now understand why Southernera didn't respond: the matter is before the South African courts, and Southernera believes it is not appropriate to argue their case outside the courts when the matter is lodged before the courts.
(I don't think it would be inappropriate for Southernera to issue a factual statement simply to calm the waters; in fact I wish they would. However, that's my opinion, and this posting is aimed at getting the facts out, so let me continue to do that.)
Let's start at the beginning:
Southernera discovered diamonds on Marsfontein early in 1997, as a result of their sampling program, magnetic surveys, and a drilling program under a normal prospecting permit. The property had been prospected by De Beers a decade ago. De Beers abandoned the property (a matter of public record) after finding nothing viable at Marsfontein in 1987.
"Infoman" states in his/her posting that "several years back J Kruger, JF Naude, FAJ Grimbeek and H Skok took transfer of the relevant portions of the farm Marsfontein". "Several years back" is something of an understatement: "Infoman" is talking about something that occurred in 1920. (Public information.) "Infoman" went on to make statements about "reservation of mineral rights" which doesn't have much to do with actually owning the mineral rights. In fact, the "reservation of mineral rights" clause was there when the South African Development Trust (now the State) acquired the property in the 1980s. The relevant information is that those mineral rights had not been registered since 1920. In other words, when Southernera and Randgold discovered the diamonds on Marsfontein in 1997, there had not been a registered (i.e., valid) mineral rights owner of the Marsfontein property since 1920.
Where there are no registered mineral rights owners, a company that wishes to acquire those rights may do so under the law by applying for them from the Government. There were no registered mineral rights owners in June of 1997 when Randgold and Southernera applied for the mineral rights: not to put too fine a point on it, the mineral rights owners were all dead, having all passed away in the 1950s and '60s (and having made no mention of those mineral rights, including in their estates, since 1920).
That being the case, Southernera's partner, Randgold, followed the law by applying to the Government for the mineral rights to Marsfontein. This is the normal course of action, for which there is a great deal of precedent. If the heirs to mineral rights do not take up transfer of those rights within two years (it has of course been more than two years since 1920), the Minister may, at his discretion, grant them to a company.
As required, Southernera and Randgold placed money in trust which would be used to compensate any successors to the original mineral rights holders, should those successors come forward. The money that was placed in trust exceeded requirements: in an attempt to fairly compensate any successors to the original mineral rights, should they come forward, Southernera/Randgold lodged nearly one million Rand in trust: this is verifiably more than the going rate for the mineral rights in the entire surrounding area. (Although mineral rights must be (a) acquired and (b) registered in order for them to be valid, someone who can prove that they are an heir to the original mineral rights holders are entitled to compensation from that money lodged in trust.)
The heirs "came to know about the mineral rights" (their words, not mine) and acquired them for the sum of R2800. That's not a typo: the heirs opened up estates, opened up a company so that they could get around subdividing the mineral rights (which would not be allowed), and then bought the mineral rights for two thousand eight hundred Rand, after Southernera and Randgold had discovered the diamonds, and after Southernera and Randgold had applied for those mineral rights.) The heirs then turned around and asked for over 50 Million Rand for those very same mineral rights.
In the surrounding area, where Southernera was also prospecting, Southernera acquired mineral rights from actual mineral rights holders (normal procedure for mining companies). Needless to say, it is standard procedure to work quickly and without fanfare to acquire the mineral rights, which they did. Mineral rights have a value in the industry, and Southernera paid the going rates to the mineral rights holders of their properties at Klipspringer (nearby). By the way, that's documented information, like everything else. In the case of Marsfontein, there were no actual mineral rights holders, so the partners (Rangold) applied for the mineral rights as covered by the law.
Southernera, as Randgold's partner, was operator of the site, and, as is normal practice, prospected the property under the prospecting permit. As stated earlier, on the same property that De Beers had abandoned, Southernera persisted, and their persistence paid off: they drilled into a valuable kimberlite.
As provided for and covered by the prospecting permit, they removed samples (drill core), and recovered diamonds from those samples. The diamonds were registered and the correct permits were obtained. (Ask the authorities, like I did.) All my research and enquiries about the documentation indicates that Southernera has followed procedure in every detail in the prospecting (as well as the acquisition of the mineral rights).
Furthermore, once a prospecting permit is issued, and a discovery is made, the owner of the prospecting permit is considered to have a legitimate expectation of being able to obtain a mining permit to mine that discovery.
I repeat that this is all publicly verifiable information. The courts will decide the issue, as they should. Either that, or the matter will be settled out of court: Southernera and De Beers confirmed within the last couple of weeks that negotiations had been under way, although when I tried to contact Mr. Oppenheimer he was apparently unavailable, as was Mr. Jennings who was in London at the time. Information pertaining to those negotiations would be interesting. For fellow investors: my intention is to clarify the issues and to bring to light information, which is available to all if you look for it, like I did.
P.S.
As I continue to verify the information I have gathered, I will post it. There's more.
P.P.S. Unlike "Infoman" I do not work for any party involved in the dispute. If you're wondering why I have gone to these lengths: it's just not that difficult to unearth most of this information (no pun intended), and as an investor I needed to know. |
