mining news
10
07.13
Uranium explorer Deep Yellow Limited (DYL),
which is active in Namibia, has announced
additional steps to reduce overhead costs
due to ongoing volatility in financial markets
and weakness in the uranium sector.
In July 2012 the managing director and
non-executive directors implemented a 10
per cent reduction in base salary and fees
and group-wide salaries were frozen in order
to protect the company’s cash resources.
In addition, DYL’s MD voluntarily waived his
FY2012 STI cash bonus and a gradual re-
structuring of the senior management team
has allowed further reductions in overhead
costs.
Effective immediately, board fees and ex-
Wits Gold, listed on the JSE and TSX, has re-
ported that it is the sole preferred bidder for
the Burnstone gold mining operation near Bal-
four in Mpumalanga Province. Burnstone is
wholly owned by Southgold Exploration (Pty)
Limited, a subsidiary of Great Basin Gold Lim-
ited (GBG), and is currently on care and main-
tenance under business rescue proceedings.
“Following an intensive due diligence by
the Wits Gold team and the submission of our
business plan, we are very pleased to have
been selected as the sole preferred bidder,
and look forward to our offer being accepted
when the plan is put to vote,” comments Wits
Gold CEO Philip Kotze.
The acquisition of Burnstone is in line with
Wits Gold’s strategy of owning and develop-
ing shallow mines in South Africa and is an
important step in the company’s develop-
ment.
Chairman Adam Fleming comments: “Wits
Gold has indicated for some time that we
would want to return value to shareholders
through dividends, and I see this as a first
step in moving towards achieving that goal.
What we will acquire at Burnstone is an asset
where some 80 % of the capital has already
been spent and state-of-the-art infrastructure
put in place, which significantly reduces the
project risk and time in which production can
commence. I believe this represents excellent
value for Wits Gold shareholders.”
Wits Gold the preferred bidder for Burnstone
The key terms of Wits Gold’s offer for Burn-
stone, disclosed in the business rescue plan,
are: payment of US$7,25 million on transac-
tion completion; reduction of the operation’s
total existing debt by 55 %; and provision of
up to US$100 million over time by Wits Gold
as working capital to support the chosen
production plan, in the form of a shareholder
loan to be paid back on a preferential basis
from operating cash flow.
Kotze further stated that Wits Gold has
developed a new, underground mining plan
for Burnstone, which is realistic, deliverable
and aims to ensure maximum benefit for all
stakeholders. The plan allows for flexibility
in the production approach and this will be
confirmed once the transaction has been fi-
nalised.
The Burnstone gold mine, which is to be acquired by Wits Gold.
Tanzanian Royalty Exploration Corporation has
informed Consulmet Metals of South Africa of the
award of the plant contracts for its Kigosi and
Bingwa/Tembo prospects located within the area
covered by the Buckreef mining licence in Tanza-
nia.
Tanzanian Royalty says it is adequately financed
to begin construction at the properties and there
will be no equity or debt offering, and no forward
sale of gold, in order to launch these projects.
Consulmet will provide all necessary services
to support the design, supply and construction of
the modular plants and mineral processing solu-
tions at the Kigosi and Bingwa/Tembo projects on
a turnkey basis, including plant design, fabrication,
project management and process engineering.
C
onsulmet to build Tanzanian plants
ecutive remuneration will be reduced by a fur-
ther 5 per cent for at least six months (to be
reviewed in November) and salary scales will
remain fixed at 2012 rates. In addition, no STI
cash bonus will be paid to the MD for FY2013
due to market conditions.
DYL’s Perth head office has been down-
sized to three people (MD, financial controller
and office manager) and plans for an office
move to smaller premises by the end of the
year are well advanced.
“We have been closely monitoring the vola-
tility in financial markets and ongoing weak-
ness in the uranium sector and recognise that
cost discipline is an essential component of
optimising the company’s cash position,”
DYL’s Chairman, Mervyn Greene, comment-
ed. “Having already taken significant steps
last year to reduce corporate overheads, it is
prudent to implement further reductions until
there are tangible signs of an improvement in
sentiment, which we believe is only a matter
of time.”
Deep Yellow reduces its overheads
