Dippenaar Comments, agree with mine and Bill G's..., nice to see others figuring it out...
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Ferdi Dippenaar, Marketing director for Harmony Gold
By: Gareth Tredway
Posted: '07-DEC-05 10:07' GMT © Mineweb 1997-2004
MINEWEB: Ferdi Dippenaar joins us now. Ferdi, you’ve decided to go into gold. Why not follow Neal into the uranium field?
FERDI DIPPENAAR: Neal’s already taken up the space, Alec.
MINEWEB: But you’re leaving Harmony. You joined in 1998. Are you tired of being in Bernard’s shadow?
FERDI DIPPENAAR: No, no, not at all. It's been great fun, honestly. Harmony has been great to me, and I would like to believe that I’ve also contributed somewhat to its success. But I’ve been given this opportunity to join Great Basin Gold. It’s a small exploration company, Alec, but with big dreams.
MINEWEB: Listed on the Toronto stock exchange. We were talking about it a little earlier. Why is it that so much of our mining talent is now going to go and ply their wares in Toronto?
FERDI DIPPENAAR: Well, we’re going to ply our wares in Toronto, but we’re going to build a mine in South Africa, and that company is also bringing a project on stream with Hecla in Nevada, the Hollister Block.
MINEWEB: Why, though, don’t you list on the JSE?
FERDI DIPPENAAR: Well, you know, that’s something I had had a discussion with them – the fact that there will be a mine in South Africa. It tends to be a bit of a logical decision, to actually go and do that. So it is definitely under discussion. I would not discount it at all.
MINEWEB: Neal Froneman said a little bit earlier that there doesn’t seem to be much of an appetite for junior mining operations on the JSE. That’s why they are looking to list Aflease in Toronto. Would you go along with that?
FERDI DIPPENAAR: No, not really. I think South Africa traditionally has been a mining country, if I can call it that. And there’s always a bit of interest. Historically probably more gold than anything else. We have in the last few years, especially with the consolidation, seen a number of companies, junior exploration companies, probably disappear in total. So it’s not that we have a range of investors that are used to actually taking a bit of capital and putting it into the real risk venture market, and actually seeing what it can deliver over time. So maybe with the current gold price where it is, and potentially the rand in future, why not? I think there’s always a need for the smaller companies to be listed and attract a bit of the high-risk money.
MINEWEB: Where in South Africa is your project?
FERDI DIPPENAAR: It’s in the Evander area, the Balfour area. It's the old Burnstone project. It belonged to Gold Fields a couple of years ago. They then sold it off, Great Basin Gold took a stake in it, they developed it as part of the earn-in at the time. They now own it. It’s got a phase one, 2.8m ounces, R700m-R800m to actually develop the mine. It's a shallow ore body, 250m down to about 500m. So you can see, it’s not going to take forever to bring it into production. It's got a recovery grade of about 5.25 grams per ton. Just to run through a few of the other numbers, average cash cost $187 an ounce. So even at that total cost of $258 an ounce, there’s quite a bit of margin at the current gold price.
[comment: $258 is apparently full production cost, includes the depreciation/amortization of mine capex]
MINEWEB: It sounds really exciting! I mean a R700m to R800m investment there, only $187 an ounce. I mean at $505/oz, as we are at the moment, that’s a very profitable venture.
FERDI DIPPENAAR: Exactly. You know, this was done at R86,000 per kg, if I had to convert it, and the current gold price in excess of R100,000. You can see why it did create a bit of interest with me, and of course it’s not the only project, it’s not a one-company project if I can call it that. The fact that it as a company is also in the stage of transition from exploration into production. And of course with that, especially in South Africa, that makes it pretty interesting as well.
DAVID SHAPIRO: Ferdi, how do these projects escape something like Harmony? I mean, why couldn’t Harmony have done something like this, or found something like this?
FERDI DIPPENAAR: I think if we go back in the history, probably two, two and a half years ago, when it was being sold or shopped around, it was offered to Harmony. But I think at that stage, we looked at Free Gold, it was merging with Free Gold, it was adding a million ounces of production to our production base. This was a project which required capital, which had a time frame to it. It was small in the bigger scheme of things. That’s why the Canadians typically are a bit more adventurous and they were willing to put the seed money into it.
MINEWEB: Looks like it could be paying off for them. Ferdi, are you going to be staying in South Africa?
FERDI DIPPENAAR: Yes, with the focus being in South Africa, initially, definitely in the next couple of years. And then of course, depending on where the company goes. The fact that it’s listed in Toronto and on Amex doesn’t mean that I physically have to go and live there. It will have separate teams managing the different projects. I love the country.
MINEWEB: I think we’re going to love Great Basin as a listed stock on the JSE – bring it on.
FERDI DIPPENAAR: Bring it on. Thanks.
MINEWEB: Ferdi Dippenaar, right hand man of Bernard Swanepoel, and now at the end of December he’s off to go and do his own thing, and good for him. In fact, it was a really nice Sens report, if you did read it, where Bernard said, “We are very proud of Ferdi going and doing his own thing”.
DAVID SHAPIRO: He’s done a very good job for Harmony, particularly with shareholders. He’s always represented Harmony to the shareholders.
MINEWEB: And a tough job he had with the Gold Fields battle. And good for him, let’s hope that he does terribly well there, which I’m sure he shall.
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