31 January 2013

Zimbabwe: Firm Sells Mines to Hong Kong Fund

GAT Investments, a local private mining firm, has sold its gold and pyrite mines to a Hong Kong fund in a deal worth US$12 million, Herald Business can reveal. GAT is owned by a local consortium led by its chief executive, Mr Victor Gapare.

In correspondence seen by Herald Business between Mr Gapare and Jiang Chuan of Shining Fund, dated January 25 this year, payments for Bilboes Holdings Limited, a gold mining company, and Iron Duke Pyrites were made last Monday.

Mr Gapare, the former Chamber of Mines chief executive, yesterday confirmed the transaction but would not give details.

"I'm in a board meeting but will be done after 4pm. It's not correct but I can talk to you and give you the angle. There's no story at the moment as we have not yet finalised," he said in a text message to this reporter.

But information gathered by this newspaper revealed that Shining Fund was to pay US$2 million for Iron Duke Pyrites. The money would be transferred from Deutsche Bank Trust Company in New York, United States, to Stanbic Bank Zimbabwe.

Iron Duke Mine in Mazowe-Glendale ceased operations in 2008. The mine produced pyrites used in the production of sulphuric acid, a raw material for fertiliser to Zimphos, while the bulk of it was exported to the Zambian Copperbelt province where it is used as a catalyst in the smelting of copper and cobalt.

On the other hand, the Hong Kong Fund was to pay US$10 million for Bilboes. The money would be transferred to the company's offshore account held by AfrAsia Bank in Mauritius from the American financial institution, CITI Bank in New York.

In an e-mail to Mr Gapare, Chuan said: "We have completed all procedures for making payment to Bilboes and Iron Duke. We will do the bank transfers next Monday. In order to run a final check, please ask Zain (status not established) if our KYC (Know Your Customer) documents are complete and sufficient for the issuance of share certificates," read part of the e-mail sent on January 25.

However, it could not be established what shareholding would Mr Gapare have in these two firms after the transactions. And in the event that the fund is gaining the majority stakes in the two entities, it was also unclear if approvals were obtained from Zimbabwe's indigenisation authorities. Foreign- owned companies are required to have not more that 51 percent stake in local companies.

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