Johannesburg - Mining entrepreneur Peter Skeat is getting back into the gold mining sector for his own account in a big way following the collapse of Mintails, the ASX-listed gold junior he helped create in 2006.
Through his private company Skeat Mining he bought the Agnes Gold mine near Barberton for R18m when it was sold at auction this week. He has also bought the former Daggafontein metallurgical plant near Springs from Mintails for an undisclosed amount.
In addition, Skeat has bought back half of the fleet of opencast mining equipment owned by Mintails and has set up a coal contract mining operation.
Neither the sale of the Daggafontein plant nor the mining equipment assets has yet been reported by Mintails, which merely stated in its September quarterly review that it was looking to sell further "non-core" assets.
Skeat injected his fleet of mining equipment plus the closed Daggafontein and Brakpan treatment plants into Mintails at the end of 2006.
The two plants were the core of the former Ergo dump retreatment scheme and Skeat had bought them previously from AngloGold Ashanti.
The Brakpan plant formed the basis for the Ergo joint venture between Mintails and DRDGold which is starting production.
Simmering feud
The Daggafontein plant was meant to be moved in large part to the West Rand to form the core of Mintails' proposed West Rand Gold and Uranium (Wergo) operation.
Mintails got into financial difficulties from about mid-2008. It has shut down the development of Wergo and has been forced to sell effective control of the Ergo JV to DRDGold, which will reap 100% of the revenues from Ergo for up to the next 12 years.
It's now clear there has been a feud under way for much of the past year between Skeat and Mintails' Australian-based chairman, Bryan Frost.
Frost told Miningmx in July he believed attempts were being made to oust himself and partner Richard Revelins from the board.
Skeat commented he was both "disappointed and disillusioned" with events at Mintails.
"I am disillusioned with the way things turned out at Mintails under the leadership of Bryan Frost. It's clear that Australian style management does not work well in South Africa. Among other things you need to raise money before you spend it," he said.
But some investors have also pointed fingers at Skeat for not doing enough to rectify the situation inside Mintails once he realised things were turning sour.
Future strategies
Skeat was initially chief operating officer but, despite his material stake in the company, not a director of Mintails.
Skeat said: "I am a mining engineer and a mining entrepreneur, not a metallurgist. I stepped down as chief operating officer in favour of Basie Maree - who is a vastly experienced metallurgist - when the Ergo project got to the stage where it needed that kind of expertise.
"Regarding Bryan Frost, I had a choice once I realised things were not going well which was to fight him or to step aside. I stepped aside because I have had enough conflict in my life recently through the confrontations with Brett Kebble and Neal Froneman."
Skeat was instrumental in the financial downfall of Kebble, pursuing him relentlessly through the courts for repayment of a debt which Kebble could not afford to settle.
He also fought a long-running battle with Froneman who had previously ousted him as chairperson of Afrikander Lease.
Skeat said his plans for Agnes were to spend the next few months assessing the state of the mine which contains a gold resource estimated at between 3m and 5m ounces of gold but is currently closed.
"We have to clean up the mess we have inherited and finalise our approach for the treatment of the mine's complex ore.
"I expect the gold price to recover above $1 000/oz next year. I will keep Agnes private until market conditions are favourable and then I will do one of two things.
"One option is to list it independently by reversing it into a listed vehicle. The second is to come to some kind of deal with one of our listed neighbours. I estimate it will cost about R100m to get Agnes back up and running."
The listed neighbours are Pan African Resources and Eastern Gold Fields.
Skeat refused to comment on his plans for the Daggafontein treatment plant, other than to say that it was still 80% intact.
- Miningmx.com
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