In the media

DRDGOLD says in talks with Chinese investor for Blyvoor

[miningweekly.com] -- CAPE TOWN – The chief executive of DRDGOLD, South Africa's fourth-largest gold producer, said on Tuesday that the company was talking to a potential Chinese investor for its troubled Blyvoor mine.

CAPE TOWN - The chief executive of DRDGOLD, South Africa’s fourth-largest gold producer, said on Tuesday that the company was talking to a potential Chinese investor for its troubled Blyvoor mine.

Niel Pretorius also told Reuters on the sidelines of parliamentary hearings in Cape Town that no firm offers had yet been made and he hoped to get funding from the Industrial Development Corporation, a South African state agency.

He said it seemed as if the Chinese investor, which he said was a diversified company, was more interested in establishing a presence in Africa rather than the specific mine.

"Out of the 12 companies I saw in China, most said ’no’ because of the high perceived political risk and secondly also the high costs of mining gold in South Africa," he said.

China’s resource-focused investment push into Africa has not tapped gold producers very much but a Chinese consortium has taken steps to take a majority stake in Australia and South Africa-listed Gold One International.

Last week DRDGOLD suspended financial assistance to Blyvoor, a deep-level mine suffering falling production, saying it would begin business rescue proceedings and not interfere with plans to sell all or part of its 74% stake.

Analysts consider South Africa’s "Big 3" producers, Gold Fields, Harmony Gold and AngloGold Ashanti, to be the most suitable buyers of Blyvoor given their deep mining experience but all have said they are not interested.

However, there has long been speculation DRDGOLD is looking east as one of its advisers is Beijing Axis, a China-focused consultancy. The other is Royal Bank of Canada.