[miningmx.com] – VILLAGE Main Reef (VMR) confirmed it had rejected two offers for its gold mines from privately-held diversified company, the Tannous Group, adding that the bids heavily undervalued its assets.
“Yes, we did receive an offer to buy Tau Lekoa from the Tannous Group,” said Ferdi Dippenaar, CEO of VMR. “The offer was R400m,” he added. Tau Lekoa produced a profit of R156m in the first quarter of VMR’s financial year.
“Surely, an offer of R400m versus the current annual cash flow potential of Tau Lekoa of probably four times that over a four-year period, say R1.6bn, is ridiculous,” Dippenaar added. “They are fishing. There are no fish in the pond for them to catch
today”.
Anthony Tannous, the owner of the Tannous Group, said its subsidiary company, Olgna Gold, had made a binding offer to VMR for Tau Lekoa as well as gold-bearing properties in surrounding areas Weltevreden and Goedgenoeg. The offer also included Buffelsfontein which VMR has currently put on care and maintenance, although it will still have to bear some costs associated with the mine.
“We would like to buy Buffels and re-open it slowly, on a phased basis,” said Tannous. “We have our finance approved and signed a non-disclosure with our banking parner,” Tannous said. “I think VMR should be saying something to its shareholders rather than keeping it quiet,” he said.
Said Dippenaar: “Maybe they should buy enough shares and become a major or significant shareholder and influence the company, or attend the AGM as shareholders
and voice their offer and opinion?”
The Tannous Group is thought to have offered R1bn for assets owned by VMR several months ago – an offer that was rejected by then VMR CEO, Bernard Swanepoel.
The Tannous Group has its roots in motor dealership and property, but it has also made efforts to broaden its business ambit in its home region of Orkney in South Africa’s North West province.
Olgna Gold, the name of which is an acronym for Orkney Local General and National Acquisitions, is interested in reviving gold mining operations in the region by using its low-cost base and ‘spit and polish’ approach to mine management.
