Wednesday, 11th January 2006 (2755 views)

Gold junior Sub Nigel has teamed up with sxr Uranium to create a new company, Aflease Gold, in South Africa.

Shareholders of Sub Nigel unanimously voted in favour of the takeover proposal from sxr Uranium, which will see both companies' East Rand assets merged in the same area.

Experts believe a host of smaller gold mining companies will follow suit and begin to consolidate following the move.

Neal Froneman, chief executive of Aflease Gold estimated the deal would leave the company with a potential yield of 14 million ounces.

He commented: "Our strategy [is] to develop mines in this near-to-surface, low technical risk, and high-margin mining environment.

"This is a significant step in the consolidation of the East Rand goldfields, and our strategy will be to continue the consolidation process as long as it is value accretive for our shareholders," he added.

The move merger comes after a number of recent upheavals experienced by Sub Nigel, including questions over delayed back-payments to affiliated companies.

However, Uranium One's East Rand gold assets were last estimated to be worth £26 million after closing prices of share transactions earlier this week.

 

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