Interview mit Froneman, CEO Afrikander Lease

verfasst von spieler, 10.12.2003, 21:17

-->Interview mit
Neal Froneman: CEO, The Afrikander Lease
By: Alec Hogg
Posted:
2003/12/09 Tue 18:00 EST
| © Mineweb 1997-2003
Neal Froneman, the chief executive of Afrikander Lease joins us now. Well,
Neal, your share price came in for an awful pounding today? down 38%.
This after you announced that you?re going to be closing down your pit
at Klerksdorp, or your open-cast mining. Now, am I correct to assume
that if you hadn?t done the deal in September to buy Kalgold for R270m,
you?d effectively be closing down Afrikander Leases?

NEAL FRONEMAN:Alec,
I think I?ve been alluding to the fact that Kalgold has been extremely
important to us. We?ve had concerns about certain issues, namely the
grade. We?ve been concerned about a strengthening rand environment, and
since we last spoke the rand has gone from roughly R7 to R6.45, so your
observation is 100% correct.

MINEWEB:Any
regrets now in actually getting involved in Afrikander Leases in the
first place because, surely, if you think about it, had you established
a company elsewhere, even a private equity company, done the Kalgold
deal on the side, you wouldn?t have the legacy that you?re sitting with
in Afleases.

NEAL FRONEMAN:Alec,
you know, Afleases still has some really superb assets, and what you?re
seeing today in the announcement is really an issue of timing. At some
point in time the rand gold price will be sufficient to mine the open
pit profitably. We sit on Bonanza South, we?re bringing that to
account. Modder East is part of Aflease. It?s a superb asset. And
unfortunately they?re a year to 18 months away, and Aflease will have a
very different profile going forward. On top of that, the uranium has
started becoming very, very exciting and Aflease sits on possibly the
best uranium reserves in the world at the moment.

MINEWEB:But
Neal, come on, let?s just get down to brass tacks here. This is a
company that?s in crisis mode, unquestionably. You don?t close down
what was your biggest operation, with 600 miners, and then start
saying,?Don?t worry guys, we?ve got a lot of positive developments on
the other side?. There must be something really serious going wrong
here for you to have taken today?s step?

NEAL FRONEMAN:Well,
look, we?ve only shut down a portion of the operation. It is the
biggest portion, I admit that, but the inner basin and the outer basin
have really been stepping stones to the better-quality assets that
we?ve attempted to bring to account. And it is still our strategy to
bring those to account. Certainly, I think it?s going to be much more
challenging to bring them to account in this environment.

MINEWEB:But
Neal, we?ve heard continuously about this R100m plant that was going to
make things so much more efficient at Klerksdorp, so much more
efficient at the area that you?ve now closed down. What happens to the
R100m plant that?s been built?

NEAL FRONEMAN:Well,
certainly the plant did exactly what it was meant to do. Alec. I think
that the undoing of the project has really been a very different
environment in terms of the economics of today, and on top of that we
find that the in situ grades that were planned from some of the
operations that we are closing down are not the in situ grades that we
are getting, so it?s not the plant?s fault, it?s really an issue of the
in situ grades and?

MINEWEB:But you didn?t answer my question, which is what happens to the plant? Does it just sit there in mothballs?

NEAL FRONEMAN:Look
it operates, a portion of it operates while we continue to treat the
old heap-leach pad, but certainly we intend to re-use a portion of it
at Kalgold, and of course a portion of it could well be used at Modder
East if, in the short term there was no alleviation to the
strengthening rand.

MINEWEB:What portion of it will be used?

NEAL FRONEMAN:Well,
certainly the crushing portion is a portion that could be well utilised
at Kalgold. Kalgold has a constraint in that area. Modder East requires
a brand new plant, and that?s been factored into the capital, so we?ve
got a range of options that we would have to consider closer to the
time.

MINEWEB:What
percentage, roughly, of the plant will now be useful? Because R100m for
a small company is a huge investment. How much of that is going to be
utilised?

NEAL FRONEMAN:Really
a very small portion while the inner basin in mothballed. Effectively
only the [indistinct] section, which in rand terms is probably only R10
to 15m worth of the plant? and I?m just guessing at that number.

MINEWEB:What
about Japango? the Japanese gold fund that made such a big investment
at around R6 a share in Afleases, the share price today incidentally
R2.95, dropping from over R4.50 yesterday. What is the reaction from
the Japanese shareholders?

NEAL FRONEMAN:The
Japanese shareholders, as we indicated at our quarterly results as
well, have made a strategic decision to exit the company, because of
their concerns of the strengthening currency. They?re not desperate to
exit, they are looking for a purchaser of their block of shares. But
they maintain that, once the economics or the currency changes, they
would certainly be willing to consider pursuing their strategy of
acquiring control.

MINEWEB:So at this point in time they?re writing it off or wanting to write it off as a bad investment?

NEAL FRONEMAN:I would think that it?s not so much the investment as the conditions we find ourselves in.

MINEWEB:Neal
Froneman the chief executive of Afrikander Lease. We will find out a
view from market commentator Piet Viljoen of Regarding Capital
Management in just a moment.

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• Interview mit Froneman, CEO Afrikander Lease - spieler, 10.12.2003, 21:17