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Wednesday, December 19th, 2018 - Buy Gold - Bringing you trusted gold news and gold investing information since 2006

Goliath Gold: Not Interested in Pamodzi

A new South African gold-focused development company, Goliath Gold (GGM), on Friday indicated that the interest it previously expressed in acquiring Pamodzi Gold’s mines has been withdrawn.

It was thought that the company was in discussions over the acquisition of Pamodzi Gold’s operations on the East Rand, close to Johannesburg, following the announcement that Aurora Empowerment Systems had been removed both as preferred bidders as well as managers of the Pamodzi East Rand and Orkney operations.

Although Goliath Gold made a cautionary announcement to this effect at the end of May, the company has now indicated that “discussions have been terminated” and that its cautionary has been withdrawn.

While some argue that the price is what caused Goliath to pull back, others claim that talks did not even get that far.

It is, however, agreed that the price will be a big deterrent to any future potential buyer. In late 2009, when Pamodzi went into liquidation, Aurora was said to be paying R215 million (US$30 million) for Orkney and R390 million (US$58 million) for Grootvlei – with an additional R150 million (US$22 million) said to be put aside to be injected into the mines.

However, since Aurora took over management, shafts have been looted and assets stripped from the mines. Some estimate that the recapitalisation of the mines will come close to R500 million (US$74 million) – clearly affecting any price offered for the mine assets.

Goliath Gold was established out of Gold One (GDO) in late 2010. The development company’s focus is on deeper, long-term assets, in contrast to Gold One, which focuses more on shallower deposits. Gold One holds a 74 percent stake in Goliath Gold.

Goliath Gold holds a strong interest in assets in and around Johannesburg which is the reason the company was interested in bidding for the Pamodzi East Rand assets.

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