Feb. 18, 2011 - Fluorspar producer Sallies is to reopen its Witkop Mine, after receiving an US$8m loan from its new controlling shareholder Maghreb Minerals (Maghreb), as well as securing sizeable orders from customers.
Sallies has been closed since June 2009 because of poor market conditions. The directors said at the time that the future of Sallies was closely aligned to that of the world economy.
"Acid grade fluorspar pricing has begun to recover, but is still not at a level that justifies placing the mines back into production, said a company statement. Not only do prices need to recover further, but the continuing strength of the South African rand, particularly against the US dollar, is a further reason for not re-commissioning the mines in the foreseeable future.
The decision to start up the Witkop mine again follows the strategy implemented by US hedge fund Firebird Management to consolidate its various fluorspar holdings under the control of AIM-listed Maghreb.
Firebird owns 56% of Maghreb and 67% of Sallies. In September last year, Maghreb bought 11.4% of Sallies from Honeywell International for US$1.2 million in cash, while in December, Maghreb announced it would buy Firebird s 67% stake in Sallies, as well as Firebird s holding of Sallies debentures.
Payment for both stakes will be in Maghreb equity, and an offer to Sallies minorities must be made by Maghreb because of the change of control.
Former Maghreb chairperson well-known South African mining businessman Richard Linnell, who is also the chairman of Coal of Africa has stood down and been replaced by Firebird executive Nicholas Davidoff, the current Sallies chair.
"Firebird s concept is to consolidate a meaningful chunk of the fluorspar business. A list of assets has been identified, but it would not be wise to identify them at this early stage, the company reasoned.
Firebird had wanted to delist Sallies when it first took the company over, but was unable to do so because it did not manage to acquire 90% of the shares.
Sallies has been closed since June 2009 because of poor market conditions. The directors said at the time that the future of Sallies was closely aligned to that of the world economy.
"Acid grade fluorspar pricing has begun to recover, but is still not at a level that justifies placing the mines back into production, said a company statement. Not only do prices need to recover further, but the continuing strength of the South African rand, particularly against the US dollar, is a further reason for not re-commissioning the mines in the foreseeable future.
The decision to start up the Witkop mine again follows the strategy implemented by US hedge fund Firebird Management to consolidate its various fluorspar holdings under the control of AIM-listed Maghreb.
Firebird owns 56% of Maghreb and 67% of Sallies. In September last year, Maghreb bought 11.4% of Sallies from Honeywell International for US$1.2 million in cash, while in December, Maghreb announced it would buy Firebird s 67% stake in Sallies, as well as Firebird s holding of Sallies debentures.
Payment for both stakes will be in Maghreb equity, and an offer to Sallies minorities must be made by Maghreb because of the change of control.
Former Maghreb chairperson well-known South African mining businessman Richard Linnell, who is also the chairman of Coal of Africa has stood down and been replaced by Firebird executive Nicholas Davidoff, the current Sallies chair.
"Firebird s concept is to consolidate a meaningful chunk of the fluorspar business. A list of assets has been identified, but it would not be wise to identify them at this early stage, the company reasoned.
Firebird had wanted to delist Sallies when it first took the company over, but was unable to do so because it did not manage to acquire 90% of the shares.
