Company & Strategy

Cape Resources  Plc was established in March 2004 to capitalise upon the opportunity to acquire diamond assets in South Africa.  In September of that year, the Company acquired a 51 per cent. interest in Golden Falls Mining (Pty) Limited (“Golden Falls”) which wholly owned the Elandslaagte Project, an existing mining operation based on a diamondiferous kimberlite pipe system. The project currently has indicated and inferred diamond resources of 1.25 million carats with further upside potential from established kimberlite deposits.

In February 2006, Cape Resources acquired the remaining 490 ordinary shares in Golden Falls for a total consideration of £190,000 in cash and 11 million ordinary shares in the Company.  Following this transaction, Cape Resources  owned 100 per cent of Golden Falls. 

In March 2006, the Group entered into an agreement to sell a 25.6 per cent interest in Golden Falls to Wheatfields Investments No. 223 (Pty) Limited (“Wheatfields”), a BEE company and an initial payment of £87,000 (R1 million) was received.  This agreement was subsequently amended to allow Wheatfields longer to pay.  This change has no impact on the mining licence granted to Golden Falls. The agreement was finalised in February 2007 and £629,371 (R9 million) was received in March 2007.

Currently, the Group has a combined strategy of firstly, seeking new business opportunities and strengthening the asset base through the acquisition of further resource assets in Africa and secondly, reviewing the property at Elandslaagte to establish its value and to establish what further action may be appropriate.

The Group has made good progress with the first part of the strategy and hope to make a detailed announcement regarding progress when appropriate. The diamond sector is beginning to show strong signs of recovery and that opportunities to acquire undervalued assets still remain available to us in this sector.

Interest is being shown again in a number of other resource sectors including coal and with our wide network of local contacts within Africa we should be able to identify strong additional opportunities to bring into the Group. Accordingly, the Company changed its name to Cape Resources Plc.

The Elandslaagte Mine remains under care and maintenance mainly because of significant cash constraints under which the Group operated and also due to uncertainty relating to the economic feasibility of the resource. During the period to 30 June 2009 the Group processed 104,400 run of mine tonnes from Elandslaagte using the pan plant system and recovered 522 carats with an average value of USD422. This was below expectations for the Mine and due to the fact that it was unclear from which part of the Mine this material was extracted, it is not possible to draw an informed conclusion from this result.