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Aflease raises R38m on 'advantageous terms' for Modder East gold project
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13th January 2009
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JOHANNESBURG ( – Johannesburg-listed Aflease Gold had raised an additional R38-million towards the funding of the Modder East gold project on South Africa’s East Rand on “very advantageous terms in extremely difficult market conditions", Aflease CEO Neal Froneman said on Tuesday.

Froneman said that the R38-million had been raised through the sale of the first tranche of shares arising from the share swap with Trinity Asset Management.

“We are now confident to enter into the second tranche,” he told Mining Weekly Online.

This would also be part of the initiative to raise the full R110-million for the completion of Modder East.

To avoid share dilution, the company would, however, avoid raising more money than it needed.

Further funding would be needed only in August.

The funding had been raised through the sale of Randgold & Exploration shares to Investec.

These shares had been acquired in a swap with Trinity Asset Management.

The three million Randgold & Exploration shares Aflease acquired from Trinity were in exchange for 30 million Aflease shares, sold at an average price of R12,72 a share, which equated to R1,27 an Aflease share.

“We effectively placed Aflease gold shares at R1,27 a share when our share price was trading well below that, which is quite remarkable in the current market,” Froneman explained.

Aflease Gold shares closed on Tuesday at R1,09 a share.

He recalled that Aflease was in the process of merging with the Australian-based BMA Gold to create Gold One International, which would be listed on both the Australian and Johannesburg stock exchanges.

Shareholders, he said, would vote on the Gold One formation on January 21.

Thereafter, bondholder approvals would have to be obtained, as well as certain regulatory approvals.

“We're talking middle-to-end February for the conclusion of this deal, which is not far off our original time line,” Froneman added.

Aflease would reverse list into BMA on the ASX and BMA would list on the JSE.

Froneman said that the “shallow, high-margin” Modder East gold mine was scheduled to pour its first gold in the second quarter of this year.

Edited by: Creamer Media Reporter


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Aflease CEO Neal Froneman
Picture by: Duane Daws
Aflease CEO Neal Froneman