Charlotte Mathews
13 May 2008
Johannesburg — JUNIOR gold miner Pamodzi Gold is considering various financial instruments to raise $30m-$50m to finance its working capital needs.
It was keen to avoid an equity issue because it did not want to dilute its present shareholders, CEO Peter Steenkamp said yesterday.
Pamodzi Gold (PZG) plans to spend R343m-R360m this year to bring production of gold up to an annual 360000oz-373000oz from 135000oz.
It recently took over the Orkney shafts from Harmony and the President Steyn operations from Thistle Mining, and looks to consistent output from these mines by the end of the year. But President Steyn in particular will need some investment.
Yesterday , Pamodzi Gold officially opened a refurbished shaft at its Consolidated Modder Mine on the East Rand, which would reach full production capacity next year and would create 350 jobs, it said.
In the March quarter, Pamodzi made revenue of R191,6m after a R42,6m realised loss on its hedge book, which was acquired when it bought the East Rand mines. Of the headline loss of 166c per share, 151c came from the hedging loss. The March quarter could not be compared with previous quarters, given changes resulting from acquisitions.
As the latest acquisitions boosted group output, the amount of gold Pamodzi Gold had to deliver to meet the commitments of the hedge book in the East Rand operations fell to 27% of total output from 36% in the March quarter. The hedge book liability was valued at R506m (R454m) at the higher gold price.
Addition of the President Steyn and Orkney operations from March saw total group output in March climb more than a third to 33805oz from 25120oz. Total cash costs for the group were $749/oz from $713.
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