[miningmx.com] — GOLD One International, said its shareholders had ‘overwhelmingly approved’ the introduction of a Chinese consortium as a strategic partner, and that CEO, Neal Froneman, would get nearly R11m in order to stay at the company for three years.
Shareholders approved the injection of at least A$150m in new capital into the company by way of issue of shares to the Chinese consortium. Retention payments to Froneman as well as his CFO, Christopher Chadwick, were also approved.
In terms of the meeting notice, the proposed retention payments are to be paid in three equal instalments spread across three years.
According to the notice, Froneman was set to receive about R3.65m on each instalment date, while Chadwick will receive about R1.15m in each of the three years.
In a statement to the JSE, Gold One said the vote to move ahead with the Chinese investment in its company was approved by 99.71% of shareholders while the resolution pertaining to retention payments was approved by 98.25%.
It said shareholder approval of the Jintu transaction, as the Chinese deal has been dubbed, was one of the key conditions precedent to the transaction being fulfilled.
Remaining precedent conditions include approval by the Chinese regulatory authorities as well as the Australian Foreign Investment Review Board approval.
The transaction got the nod from the Namibian Competition Commission earlier this week.
The Chinese consortium is made up of China’s biggest state-owned investment company, the Citic Group, which is involved through the Baiyin Non-Ferrous Group and China Development Bank through its China-Africa Development Fund, as well as Long March Capital.
“I firmly believe that shareholders have understood the benefits to the company as well as the potential for future growth that the combination of Gold One and the Chinese consortium brings to the table,” said Froneman.
Announcing the deal in May, Gold One said that the offer by the Chinese consortium for all of its shares implied a post-transaction enterprise value of R5.9bn.
The deal has certainly been a company-changing one in that the company started off the year as a gold junior bringing its first production from Modder East online and now it has the potential to become one of the world’s top five producers.
Last month Gold One reported a change of fortunes by posting a profit in its first half on the back of a doubling of production of 54,699 ounces and a 26% jump in the gold price received to US$1,446/oz.
Earnings per share were R0.09 versus a loss per share of R0.03 in the previous year.
The swing from loss to profit was as a result of higher revenue from gold sales, reduced general and admin expenses, lower finance costs and a positive fair value adjustment on the convertible bonds.
The company also recorded a threefold increase in net cash flow from operations.
