The successful implementation of a debt-reduction strategy was key to the turn-
around of debt-laden diversified mining company Metorex, its new CEO, Terence Goodlace, said last week.

Simultaneously, urgent attention would be given to turning current projects into profitable operations, the former head of Gold Fields’ South African mines told Mining Weekly.

Immediate steps would have to be taken to minimise the losses of antimony and gold producer Consolidated Murchison (Cons Murch) and also to minimise the group’s capital 
expenditure.


“There will also be a judicious disposal of assets; I wish I could tell you more, but we are under cautionary,” he said.

The company under his leadership would also seek to initiate corporate activity with other cash-flush mining companies that could take Metorex into other geographies and commodities.

He would strive to place the company in a position in which it would not need to go to the market for further funds, which CFO Maritz Smith said it might have to do in six 
months.


“But I have to be realistic about the situation. If we do happen to do something from a corporate perspective, it will go a long way 
towards assisting us into the future,” Goodlace added.

Cons Murch was being downscaled and would either be placed on care and maintenance or sold.
“It pumped up volume over the last six months, but the grades are very low and it continues to make losses,” he said. It was also disappointing that demand from the operation’s key antimony offtake customer had dried up.

“Cons Murch has always been a significant antimony producer for South Africa, but the Chinese dominate the market,” he said.

Operating efficiencies had been put in place at fluorspar-miner Vergenoeg and were 
enhancing the quality of the material to 
acidspar and the company’s Spanish partner was continuing to give the operation strong support.

“Good-quality acid-grade fluorspar is what the market wants, so from that perspective, the mine is still well positioned, but market conditions have to be considered,” he said, adding that prices were lowering.

On the Ruashi copper project in the Democratic Republic of Congo requiring higher copper prices to achieve viability, he said: “Copper is very difficult to predict, but if one looks at the cost of production of the global copper producers, there will ultimately 
no longer be a copper business if the copper price goes much lower,” he said.


“Slightly higher prices than we are seeing now are needed to restore some semblance of order in the copper market, but inventories have increased dramatically and they could still put more downward pressure on the copper price.


“We need to get Ruashi to full production and make sure that it can cover its own costs plus its capital. The challenge for us as a corporate is to see how we can best deal with that debt situation.

“Ideally, we would like Ruashi to pay its own way, and we do have the ($3 900/t) hedge in place that gives us some insulation, but, at the end of the day, we need to see what we can do from a corporate perspective to take out a big slug of that debt,” he added.

He intended giving strong support to asso-
ciate gold company Pan African, which he said had proved itself over the last six months. “In terms of cash preservation, the company would have to be careful about where it explored and how much exploration it did,” he said.

Former Metorex CEO Charles Needham would concentrate on corporate affairs, 
including risk management, investor relations and government liaison.


“A key aspect for me is to avoid throwing the baby out with the bath water and ensuring there is continuity,” Goodlace emphasised.

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