Swiss to fund Aurora

Aurora appears to have come up with the funding it needs to satisfy liquidators that it can complete the purchase of the Grootvlei and Orkney mines, formerly owned by Pamodzi Gold.

At a media briefing on Thursday, it was announced that the South African company had concluded a transaction with a Swiss-based alternative investment firm Global Emerging Markets (GEM).

Aurora's management said that under the agreement, GEM had committed to subscribe for new shares in the listed entity currently being acquired by Aurora up to an aggregate subscription value of R750 million.

"We are confident that with this support in place, Aurora is well-positioned to become one of the principal players in mining and resources in South Africa," the company's chief executive officer Zondwa Mandela said.

Seated with Mandela at the briefing was President Jacob Zuma's nephew Khulubuse Zuma, the company's chairman.

Aurora director Michael Hulley - who was also the president's lawyer - told the briefing he hoped to repair the company's relationship with labour.

"Labour is a critical component for us... We must put our relationship with labour back in its rightful place."

This followed complaints by the National Union of Mineworkers (NUM) that after Aurora took over the two mines from Pamodzi, it failed to pay its workers regularly.

Hulley said the mines were still in the hands of the liquidators and that the transaction involving Aurora was still to be concluded.

Aurora would not get its hands on the R725 million (nearly US100 million), until the company issued shares.

"GEM will only provide funds to a listed entity," Hulley said.

"However, we are happy with these terms and conditions."

Hulley said the liquidators were in possession of a funding letter from GEM.

"We are speaking to the liquidators to finalise the transaction and the matter will be in court on Friday... so we mustn't speak as if the entire deal has been consummated as that would be disrespectful to the liquidators."

Hulley said the liquidators were not "the last hurdle" for Aurora as there was a regulatory process to be followed and then listing would occur, "and this also has a regulatory framework".

Aurora would - until its listing - obtain interim funding which, according to Hulley, would be "borne out of the same relationship".

Asked if this included the R725 million, he said it did not.

Asked if the GEM transaction would end in failure just as Aurora's agreement with Malaysian group AM Equity had done, Hulley said Aurora had been "misled" by AM Equity.

He assured the media briefing that workers at both the Grootvlei and Orkney mines had been paid last week.

"They will also be paid in the course of this week and by the end of the week... we think this will provide sufficient basis for establishing our bona fides."

Reacting to media reports that a Chinese bidder was interested in acquiring both mines, Hulley said that Aurora had always understood that it was the preferred bidder.

"Yes, we understand we have obligations and we're intent on meeting them whether there are rival bidders or not."