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Arqomanzi fights for mine

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 An entrance to Lily mine in Mpumalanga
An entrance to Lily mine in Mpumalanga

A bidder for the ownership of Mpumalanga’s Lily and Barbrook mines, Siyakhula Sonke Corporation (SSC), has turned the tables and is now in the driving seat to sway the deal in its favour.

Arqomanzi – an entity formed by SSC subsidiary, Flaming Silver 373 and Taung Gold – has won its application in the Mbombela High Court, which declared it an independent creditor of Vantage Goldfields SA (VGSA).

The court declared that Standard Bank validly ceded its claims to Arqomanzi.

The entity approached the court for this declaration after Standard Bank ceded all of VGSA’s loans amounting to R389 million to Arqomanzi. Arqomanzi’s “innovative manoeuvring”, as Mbombela High Court Acting Judge Hendrik Roelofse put it, will result in it having the upper hand in the matter as it becomes VGSA’s biggest creditor.

This puts VGSA in a position in which it must now pay Arqomanzi back all the claims onceheld by the bank or renegotiate other options to settle them.

Arqomanzi is bidding to take over ownership of the mines and has made an offer to business rescue practitioners, Rob Devereux and Daniel Terblanche.

Its offer, amounting to R472 million, aims to focus on reopening the mines, settling with creditors and former employees, upgrading plant and infrastructure, and creating much-needed employment opportunities.

The court order now requires the amendment of the business rescue plans dated May 25 2016, February 16 2017 and August 6 2018.

On the other hand, VGSA and the business rescue practitioners recently accepted an offer from Real Win Investments (RWI) to buy a 100% stake in the company. RWI’s offer has, however, not been made public but VGSA’s chief executive, Mike McChesney, and Devereux claim that they have received the company’s proof of funds.

McChesney did not respond to a written request for his comment on the court’s judgment.

Neil Herrick, Taung Gold International Limited CEO, said: “Arqomanzi is satisfied with the judgment and we look forward to the business rescue practitioners’ prompt implementation of the orders made by the court.

“In particular, the business rescue practitioners must now prepare amendments to the business rescue plans, publish them and finally the creditors of the companies will have the opportunity to consider the plans and to approve them.”

He said: “This is vital for Arqomanzi to take forward its plans for the reopening of the Lily and Barbrook mines for the benefit of all stakeholders, not least of whom are the former employees, their families and the community at large, who have borne the brunt of the protracted and unnecessary delays in the business rescue process.”

READ: Are Lily and Barbrook assets being stripped?

The recent application is one of many court challenges that SSC has launched after VGSA decided to cancel the sale agreement it signed with SSC Flaming Silver 373.

VGSA cancelled the agreement, which gave SSC a 74% stake, after claiming that SSC failed to provide its proof of funds. SSC then pursued a court application to force VGSA to hand over share certificates.

The Mbombela High Court declared the sale agreement null and void after the former Flaming Silver director Ferdi Dippenaar applied to intervene in the case and provided evidence that the board which took a decision on the fourth addendum of the sale agreement was not properly constituted.

The court, however, did not pronounce on whether VGSA was right or wrong in unilaterally cancelling the contract and whether its reasons for doing so were legitimate or not. SSC is appealing this decision in the Supreme Court of Appeal.

The mines were put under business rescue in 2016 following the collapse of an entrance to Lily Mine on February 5 of that year. Three workers in a container office were buried in the disaster and 75 of their colleagues were rescued.


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