conti and absa, page-4

Thanks BBB and for now I think “irony” is a good word that most of us can appreciate and maybe others can shed some more light on the situation, if there is anything to shed. I hope that everything is at arms length and legit and I’m not saying it isn’t. For now Conti bought some distressed assets from Mashala who are/were controlled by ABSA under a scheme of arrangement.

However, what really concerns me as well is the funding of De Witts based on the preliminary draft of the BFS. Mainly because the cost base changed so dramatically in the ASX announcement of 28/11/11 from what we were expecting. That and Conti have hinted in several articles that ABSA have already made approaches to funding De Witts – I bet they have!

Mihal’s post (#7640362) in relation to this week’s Minesite article/interview/spin with JB is interesting when he states “We will be using debt finance to get Witterkrans going”. It also says “Barclays and ABSA have committed an aggregate debt facility of US$65 million to help with the development work at Penumbra, and there’s no reason to suppose that similar sorts of arrangements won’t be put in place for Witterkrans in due course.”

With total upfront capital of $219m possibly to be spent in the first 3 years of De Witts (P4 of ASX Release 28/11/11) alarm bells should be ringing.

If the loan and facilitation fees for a $65m package for Penumbra are of interest, then an additional $219m package should also raise the eyebrows of a few investors.

In fairness, Conti did make mention of an alternative finance offer for Penumbra last year and who knows maybe they just want to break the ABSA stranglehold? However, I to seem to recall that being associated with ABSA was somewhat of a feather in their cap.

Also remember it was the preliminary draft of the BFS for De Witts and there is much more analysis and optimisation work to be done in defining the resource and the figures. I know some possible savings were also mentioned at the time. Still most of us were shocked at the initial $219m that they presented.

I have plenty of other questions that stem from the Conti/ABSA association but I’ll hold onto them for now .