Johannesburg - Bernard Swanepoel is bidding for control of JSE-listed shell Village Main Reef Gold Mining in a move which market observers reckon could be a precursor to merger and acquisition activity by the former Harmony CEO.
Swanepoel announced on Friday that his company, To the Point Investments, had acquired 37.8% of Village at price of 46c a share from Harmony to which it paid R1m in total.
That follows the earlier acquisition of 10% of Village Main in June at 100c a share costing R607 000 from a "Mr Cobbett" who is described as "a long-standing shareholder in Village" and who retains a 13% stake in the company.
To the Point Investments now holds 47.8% of Village and will make an offer to minorities at 100c a share to acquire the rest of the company as required by the Securities and Exchange Commission.
According to Swanepoel in a statement accompanying the announcement: "We see a great opportunity to re-build Village, incorporated in 1889 and listed in 1934, back to some of its former glory.
"We are excited about making Village the "next-generation" resources company and look forward to unlocking value for its current and future shareholders."
Interviewed by Miningmx.com on Friday, Swanepoel said he intended using Village as "a vehicle to play in the resource space. It will not necessarily be a gold vehicle as I have seen a lot of opportunities in other sectors such as coal and platinum."
"Village will also provide an opportunity to small investors to play in the resources game. There are plenty of unlisted platinum plays in SA at present but it is impossible for a small investor with just a few thousand rand to get into those.
"But maybe if Village ploughs R10m into buying a material stake in one of those plays then small investors can get exposure through Village."
Swanepoel added that he would looking at opportunities in the rest of Africa as possible investments for Village as well as in SA. He confirmed that Cobbett intended staying invested in Village.
"I have already tried to buy more shares from him to get above the 50% level but he won't sell me any more, " he said.
Swanepoel first bought the stake in Village early last year when still CEO of Harmony. At the time he was considering a number of options for the future structure of Harmony.
One of them was to split Harmony into two separate operations with the long-life, higher-grade companies grouped in one - dubbed "qualco" by analysts - and the short-life, marginal operations in another - dubbed "crapco" by analysts.
Village, it seemed, was destined to be Harmony's "crapco" but nothing happened in the run-up to Swanepoel's abrupt and unexpected resignation in August.
Since then, new CEO Graham Briggs has been following a policy of disposing of a Harmony's marginal assets with a number of shafts being sold to Pamodzi Gold.
Suggestion in the market is that Swanepoel may be revisiting the "crapco" concept for Village as soaring rand gold prices re-invigorate prospects for the SA gold industry while Harmony and AngloGold Ashanti have both stated their intentions to dispose of further operations considered "non-core".
Swanepoel resurfaced in January this year when he revealed he had formed To The Point with partner Clinton Halsey - whom he described as "one of a host of bright, young people who have left Harmony over the past five months. He"s a chartered accountant and looks after corporate finance".
To The Point is a consultancy intended to help companies with their growth strategies.
Swanepoel said his business plan was to have four clients - ideally three involved directly in mining and one related to mining - which his consultancy could help.
His clients so far include ASX-listed Mintails - which is developing various gold and uranium dump retreatment projects on the East and West Rand - and AIM-listed Central African Mining and Exploration (Camec).
Camec is involved in base metal operations in the Democratic Republic of Congo (DRC) and also intends developing a platinum mine in Zimbabwe. Swanepoel is a non-executive director of both Camec and Mintails.
Swanepoel told Miningmx at the time (January 23) that he might also get involved directly in a mining operation of his own once he had built up some capital.
He said: "The minerals business is booming and it seems like anyone can make money at present. But that can change. Some of the most interesting periods I had at Harmony were during the tough times when people were selling assets and we were buying them.
"That could happen again and you could say that's my dream for the future. I'm 46 and I reckon I am still young enough to have a major innings ahead of me."
Six months later Swanepoel's predictions are already coming true. Times have gotten markedly tougher for the junior miners with share prices tumbling across the board - Pamodzi Gold being a particular case in point.
The message from the Village acquisition seems clear enough - Bernard's back in the game.
For more mining sector coverage, go to miningmx.com.
- Miningmx.com