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PZG - Pamodzi Gold Limited - Joint announcement - Pamodzi Gold Orkney (Pty)

Release Date: 05/08/2011 17:26
Code(s): PZG
 
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PZG - Pamodzi Gold Limited - Joint announcement - Pamodzi Gold Orkney (Pty) Ltd (in provisional liquidation) and China African Precious Metals (Pty) Ltd Pamodzi Gold Limited (Incorporated in the Republic of South Africa) (Registration number 2002/013039/06) Share code: PZG ISIN: ZAE000088563 ("Pamodzi Gold" or "the Company") JOINT ANNOUNCEMENT - PAMODZI GOLD ORKNEY (PTY) LTD (IN PROVISIONAL LIQUIDATION) AND CHINA AFRICAN PRECIOUS METALS (PTY) LTD The Joint Provisional Liquidators of Pamodzi Gold Orkney (Pty) Ltd (in provisional liquidation) ("PGO") and China African Precious Metals (Pty) Ltd ("CAPM") are pleased to announce that an agreement ("Agreement") has been concluded for the acquisition by CAPM of all of the assets of PGO relating to its Orkney gold mine ("Mine") for a consideration of R150 million, subject to adjustments in terms of the Agreement that may be applicable in respect of removed or destroyed assets. This Agreement is subject to the fulfillment of a number of suspensive conditions, including that all necessary regulatory and court approvals be obtained by certain specified dates, but has been approved by the major secured creditor, the Industrial Development Corporation of South Africa Ltd ("IDC"), and is supported by the trade unions NUM and Solidarity. CAPM is 74% owned by Superb Gold Ltd, an affiliate of the SSC Mandarin Group ("SSC"), with 26% owned by a broad based black economic empowerment consortium led by Mr. Ellias Khumalo. SSC has various other mining operating assets in South Africa, specifically in the Northern Cape and Free State provinces. A phased implementation plan has been proposed by CAPM in respect of the Mine. It is expected that it will spend more than R525 million on Mine developments and on erecting a new gold plant at the Mine, in order to restore the operations and prepare the Mine to resume full production within 12 months from the completion date of the Agreement. SSC and CAPM chairman, Mr. Robin Lee said: "We are very pleased to have reached an agreement and look forward to restore the Orkney mine to its previous glory. We are mindful that the workers have endured a sustained period of suffering and hardship. CAPM is happy to contribute meaningfully to the employment market in South Africa, assisting in a small but positive way for Government to reach its employment targets. Our investment represents confidence in the Government`s leadership and their macro- economic policy." Johannesburg 5 August 2011 For more details contact: Johan Engelbrecht on behalf of the Joint Provisional Liquidators +27 (0)12 996 1043 SSC Mandarin +852 2504 2333 Transaction advisors to the Joint Provisional Liquidators: Standard Bank
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