South Africa’s
The restructuring, which has yet to receive regulatory approval, will involve eight public companies.
In the first of two phases, Johannesburg-listed
In a separate deal, South Africa’s
The merged Consolidated African Mines may then be folded into the new JCI, or unbundled as an independent company that would own about 33% of JCI Ltd.
In the second phase, JCI will move its primary listing and domicile to Toronto. Mangement has cited several reasons for the move, including:
– an improved share rating and enhanced access to capital markets;
– Toronto’s recognition as “the strongest home” for gold companies; and
– the raising of JCI’s profile and value through its inclusion in the TSE 300 index.
In terms of production, JCI would become the third-largest gold company in Canada and reside in the top quartile of the TSE 300.
Also in the second phase, JCI would boost to 100% its ownership in London-listed
Management estimates that the new JCI will be the world’s ninth-largest gold producer, with output next year projected at 1.4 million oz. gold, produced at a cash cost of US$238 per oz.
As its main operating assets, the company will have a 100% interest in Randfontein and a 50% stake in the Western Areas mine — the other 50% being held by
JCI will also hold substantial interests in two major development projects — South Deep at Western Areas and Morila in Mali — as well as exploration projects in Africa.
The transaction ushers in a new era for the venerable JCI mining house, which ran into financial difficulties in early 1998 after becoming South Africa’s first black-owned mining company.
Current Randgold Chairman Brett Kebble, who will become JCI’s chief executive officer, says the new company will focus on developing low-cost gold projects, as well as on acquisitions.
The restructuring, he says, “creates a substantial gold business with a balanced portfolio of operating assets, development projects and exploration projects. It gives the group a simple, investor-friendly structure, and it will increase the free float of shares, which should enhance trading liquidity.”
In addition to Kebble, the new JCI will have the following executive directors: Roger Kebble, operations; David Kovarsky, finance; John Brownrigg, technical; and Mark Bristow, new business development (Bristow will continue as CEO of Randgold until it is incorporated in the new JCI).
Anglo American executive director Hank Slack will become JCI’s non-executive chairman. The remaining non-executive directors have an international background: Wiseman Nkuhlu, current chairman of JCI Gold; Rupert Pennant-Rea, former deputy governor of the Bank of England; Tokyo Sexwale, former premier of Gauteng province; Frank McKenna, former premier of New Brunswick; William Nairn, technical director of Anglo American; Mark Wellesley-Wood, a British banker; Royden Richardson, former partner in Richardson Greenshields (now owned by Canada’s Royal Bank); Vaughan Bray, former CEO of Johnnic; and John Hick, Placer Dome’s former business development director.
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