After achieving a R950- million settlement with JCI, the late Brett Kebble company, Randgold & Exploration (R&E), is back in business and keen to fill a perceived “unfilled space” on the current South African mining landscape.

On the one side of that “unfilled space” are the full equity operational participants in mining ventures, and on the other side the banks.

R&E wants to wedge between those two extremes as a creative resource participant and funder.

It is not looking for 100% of the equity upside, but is also unwilling to settle for the value of bank lending rates.

R&E sees itself as reducing risk by participating at a level that lies between those two extremes.

It will use its R500-million of unencumbered cash as well as its knowledge to turbo-boost companies left stranded by the current difficulty to access funds and the reluctance of shareholders to be diluted in order to secure bank finance.

R&E CEO Marais Steyn tells Mining Weekly that much thought and research have gone into the company’s envisaged resource participation.

“We have tangible opportunities. My desk is full of them,” Steyn says.

R&E has observed the success of royalty businesses in Canada, where companies have built successful resource groups as nonoperational resource-industry participants.

Such businesses have been able to obtain royalties by being part of business start-ups. R&E is understood to have various models that simulate royalties and it would like to use these as instruments of participation.

Many of the opportunities currently being offered to R&E are brownfield opportunities, requiring only moderate boosts and R&E wants to participate in the upward trajectory on the basis that, without its intervention, creativity and cash, there would not be the same level of upside.

It is prepared to operate in a risk environment that banks perceive to be biased in favour of the equity participants.

R&E is known to be studying a number of opportunities and sees its participation as unlocking substantial value.

At the time of going to press, it was preparing to embark on a roadshow in order to seek shareholder approval to “fill the unfilled space”.

If shareholders back the idea, the company saw an interesting future for itself.

Prospecting Rights

In terms of R&E’s works programme agreement with the Department of Mineral Resources, it is obliged to execute a number of prospecting and exploration programmes.

In complying with these, R&E has embarked on a ‘best of breed’ approach of engaging the most appropriate specialist to assist in the final decisions on whether to go operational on prospect rights, or whether to joint-venture or sell it.

The company has an exploration-drilling core yard in Randfontein that contains geological information that can be used in future bankable studies, and sees itself as a participant that will seek to reduce greenfield risk ahead of project development.

Meanwhile, it can be reported that R&E has recovered R218-million from other liquidated estates and settlements, including R41-million from Kebble’s estate, and, with the JCI settlement, will distribute R1-billion to its long-suffering shareholders.

Steps will also be taken for a resumption of the trade in R&E American Depository Receipts in the US, where it has been banned.

The US Securities and Exchange Commission (SEC) deregistered R&E for its failure to comply with its rules.

“But we have now cleansed the company and believe that we meet the preliminary requirements, and we’ve instructed our US counsel to negotiate with the SEC to lift the ban,” Steyn says.

Further recovery of misappropriated assets remains a high priority, with several large claims against Kebble-era executives and service providers remaining.

“We will carefully balance between investing in litigation and preserving and growing the current asset base,” Marais promised.

R&E has two major shareholders in Allan Gray and Investec that collectively make up 55% of the holding.

To watch a video in which Randgold & Exploration CEO Marais Steyn tells Mining Weekly Online’s Martin Creamer that the fraud-hit Randgold & Resources is set to resume JSE trading on June 4, click here.