JOHANNESBURG (miningweekly.com) – A signed letter of commitment had been received for a R626-million debt-and-equity "job-saving solution" for the provisionally liquidated Pamodzi Gold group, embattled Pamodzi chairperson Ndaba Ntsele confirmed to Mining Weekly Online on Tuesday.

Ntsele would, however, neither confirm nor deny that the investment commitment was from a Chinese source, believed to be the China Africa Development Fund, but said the R626-million investment offer was for all Pamodzi Gold's assets, including the Free State assets, and not merely for Orkney and the East Rand mines.

This clashed with Harmony Gold's announcement on Monday that it had secured the support of labour unions as well as State-owned preferred creditor, the Industrial Development Corporation (IDC), for its R405-million bid to acquire Pamodzi Gold's Free State assets.

Ntsele told Mining Weekly Online that he was challenging for the entire suite of assets in all three areas, but did concede that his offer was sufficiently flexible to accommodate a partnership with Harmony in the case of the Free State assets.

"We have structured this in such a way that all the jobs can be saved," Ntsele told Mining Weekly Online, adding that the offer was backed up by sufficient proof of funds.

"Fortunately we're talking from the position of having money in our back pocket, which could be released in weeks. I have written to the unions informing them.

"I am going to fight to save all jobs. Saving jobs is critical. The union must make a call. They shouldn't judge me on Best Rock, but on Rand Uranium," Ntsele told Mining Weekly Online.

Best Rock is the source of funds that failed to deliver after months of Pamodzi Gold promising that it would, and Rand Uranium is an unlisted company that is owned 40% by Harmony Gold and 60% by the Pamodzi Resources Fund, which Ntsele helped to create.

"We are not interested in only some of the Pamodzi Gold assets; we want everything, but we are prepared to enter into a partnership with Harmony in the case of the Free State assets," he said.

Ntsele added that the R626-million plan had been submitted to the liquidators' adviser, the Standard Bank, and also to the liquidators themselves.

The new investors, while not seeking IDC funding assistance, were seeking the non-financial backing of the State-owned financial institution on the issue of full job preservation.

Ntsele said that the objective of the investment - which Mining Weekly Online understands to be from the coffers of the China Africa Development Fund - was to provide "a group solution" to Pamodzi Gold's funding challenges.

Ntele wanted to "save as many jobs as possible" by bringing some or all of the group companies out of provisional liquidation.

He said that the investment was subject to the conclusion of a satisfactory due diligence process, which was scheduled to be completed "in the near term".

Liquidator Enver Motala had not responded to Mining Weekly Online's call at the time of going to press, but Ntsele did undertake to provide more details within weeks.

Mining Weekly Online reported last month that strong bids had been received from a Chinese organisation, which was showing interest in both Orkney and Pamodzi Gold's East Rand gold assets, but, at that stage, no mention was made of an interest in the entire group, including the Free State operations.

While Motala was prepared, at that stage, to confirm the two strong local bids for Orkney and the finalisation of Harmony's Free State bid, he would neither confirm nor deny that the China Africa Development Fund was moving in on the group.

"We have some very lucrative offers for Orkney, two of which we are seriously considering," Motala did admit at the time.

The announcement of the preferred bidder for Orkney, which had undertaken to absorb its entire work force, was expected last week.

Former Pamodzi management, including Ntsele and Pamodzi Resources CEO Ken Steenkamp, have reportedly been working in tandem with the China Africa Development Fund.

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