A technical team from mining services company JIC was doing an on-site technical study at Pamodzi Gold’s provisionally liquidated Orkney gold mine to determine how much cash would have to be injected into the business, liquidator Enver Motala said last week.

Motala estimated to Mining Weekly that between R25-million and R40-million would be needed, with a large portion of the R25-million being needed to pay salary arrears.

Motala said that two representatives from JIC had been at the Orkney mine last Monday, and had followed up by sending technical team to site the following day.

“It appears to be all systems go with JIC. I am hoping that we’ll have an agreement signed and sealed soon. My hope is that we can resume operations before the weekend, but at the very latest on Monday,” Motala, who has been appointed provisional liquidator, together with Allan Pellow of Westrust and Deon Botha of Corporate Liquidators, told Mining Weekly.

Motala said that the technical team was concentrating on putting mine-safety regulations in place.

He had met representatives of Orkney's two main labour unions, the National Union of Mineworkers and the United Associations of South Africa,  and about 100 creditors, who had been invited at short notice.

“I have consensus from all parties concerned to go ahead with the JIC deal,” Motala said, adding that JIC would act as interim manager and funder.

JIC Mining Services CEO Jagdish Parekh told Mining Weekly that JIC had, several weeks prior to the provisional liquidation, proposed an operational turnaround programme to the Orkney management.

Since then, JIC had provided similar details to the liquidators and believed that there was not a case to liquidate Orkney.

“There’s tremendous scope and potential to save the operations,” Parekh told Mining Weekly Online.

Although JIC remained a Pamodzi creditor, it had never sought to liquidate the Orkney company.

“We sincerely believe that, at an operational level, Orkney can be turned around and that was what we proposed to management.

“It’s purely an operational turnaround strategy that we are proposing We believe that the mine can be saved and that it should be saved,” Parekh said.

Motala said that he was keen to preserve value, in order to be able to dispose of the Orkney operation as a going concern, at a reasonable price, in the months to come.

“The payment of the staff is the most urgent thing at this point in time. Some of the staff haven’t been paid their February salaries and the rest of them need to be paid for March as well,” Motala said.

While there could be new bids and offers of compromise on April 14, the return date for the provisional liquidation, Motala said that, in the meantime, the liquidators had to take immediate remedial action.

“We’ve got to get the staff remotivated by telling them what the plan is, get funding in place so that they can get their salaries, and explain to them that we are going to do everything in our power to protect their jobs and to keep the mine alive.

“We have a huge socioeconomic problem in South Africa, as a result of the economic situation that we are in, and we have to protect these jobs.

“Every person who is working on that mine is a bread winner and probably supports many other people. On average, you can take the 3 000 workers and multiply the number by ten.

“There is also a serious problem in the Orkney area, and many service providers are dependent on the mine continuing to operate and local businesses are also dependent on the economic spin-off business that they get if people continue to be employed,” Motala said.


Motala said that he had made it clear to JIC that a deal would not mean that JIC would automatically be a preferential bidder in the long term.

“Obviously, as liquidators, we have to be very transparent in this process, we have to make sure that all interested parties are given an opportunity to make bids and, going forward, we will look at whichever is the best bid. In order to do that, the liquidators need direction from the creditors,” he said.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.