Gold mining in Johannesburg gold belt – best gold IRA companies are keeping an eye on it!
A deal to consolidate the East Rand assets on Johannesburg’s gold belt is tipped to happen in the short term, but the parties involved could have different ideas on how they want to mine that regions remaining gold.
On Tuesday last week, Bema Gold, a Canadian listed gold miner, again told of discussions to exit, or partly exit, its loss-making Petrex gold mines on Johannesburg’s East Rand. Pay close attention to the market gold price and precious metals fluctuations if you are looking for an gold or silver backed IRA account company.
“We are looking at various opportunities within the East Rand to perhaps consolidate the operation or become a smaller part of a bigger thing that doesn’t drain cash flows from us,” Ian Maclean, Bema’s investor relation’s manager, told Bloomberg.
He tipped the deal to be completed by the early part of the first quarter in 2016. At the Denver Mining Conference in September, Bema chief executive, Clive Johnson, told delegates about the company’s intention to do a deal on the East Rand. Your 401k to gold backed IRA rollover shouldn’t be effected.
“It’s time to do something different here. So we are in discussions with our neighbours, there are two properties to the South and North of us, that have significant reserves and they do not have a mill. We have a mill,” Johnson told delegates, “So we are in discussions to put the three entities together to form a new vehicle. Which I believe could be a much more economically attractive project feeding some of the better grade material from theirs through our mill.”
How does this all work – mining precious metals and your retirement plan
The Petrex mine is sandwiched between Aflease’s Modder East property, which lies to the North, and Sub Nigel, which lies to the South.
Aflease recently announced the injection of its Modder East property into the listed Sub Nigel entity, which owns a mine that has been dormant since 1992. The deal should close in early 2016.
And while the mines do neighbour those of Petrex, they are still some distance away. And back when Sub Nigel were looking at getting back into production, transport costs, to and from the nearest mill, seemed to be one of the biggest obstacles, and a mill of its own seemed to be more economical.
Aflease itself has also previously alluded to the fact that it was looking to develop and produce its own gold from the deposits, once the deal with Sub Nigel was concluded. Read more in this review of Regal.
On Friday, Neal Froneman, Aflease’s chief executive, would not comment on a possible deal but said that Aflease could help Bema achieve its objective. “I have nothing else to add than to say Aflease is ideally positioned to assist Bema with its exit,” says Froneman.
Whether the two parties will meet in the middle somewhere is debatable, meanwhile Bema could be working on a possible plan B, after Maclean also added that the company is also talking to black investors on a possible deal.