Business

Court clears gold miner’s sale, but fight rages on

2019-08-11 14:49

The battle for the ownership of Mpumalanga gold mines is in for a long haul despite a high court judgment that settled the matter.

The Mbombela High Court dismissed an application by Siyakhula Sisonke Corporation (SSC) subsidiary, Flaming Silver, on Thursday for leave to appeal the court’s decision that rendered its sale agreement with Vantage Goldfields (VGO) null and void last month.

VGO cancelled the sale agreement in March claiming, in the main, that Flaming Silver did not have the funds to reopen Lily and Barbrook mines in Louisville near Barberton – a claim the company denied.

When Flaming Silver launched an appeal to force VGO to hand over the share documents in line with the sale agreement, its former director, Ferdi Dippenaar, put the spanner in the works by bringing his own application that sought to declare the agreement null and void because a meeting that took a decision about a fourth addendum to the sale agreement was not properly constituted.

Dippenaar succeeded in his application and the judgment collapsed the deal, but Flaming applied for leave to appeal which was then dismissed with costs.

The mines have been under business rescue since 2016 after an entrance to Lily mine collapsed and buried three workers. A capital injection of R310 million was needed to reopen them, according to the business rescue practitioner’s report.

But SSC CEO Fred Arendse said the matter was far from over. “Our next step is to petition the Supreme Court of Appeal for leave to appeal. We are not surprised by this judgment and we are awaiting the reason for this judgment, which will be available only next week.”

The mines have been under business rescue since 2016 after an entrance to Lily mine collapsed and buried three workers. A capital injection of R310 million was needed to reopen them, according to the business rescue practitioner’s report.

Meanwhile, VGO CEO Mike McChesney said the judgment paved the way for his company to sell its wholly owned subsidiary, Vantage Goldfields SA (VGSA), to Real Win Investments – which made an announcement last week about the acquisition of 100% of VGSA.

“Naturally, we are delighted with the judgment because it confirms our long-held view that dealing with Arendse or any of his companies would not result in a positive outcome for creditors and communities … After 21 months of unfortunate delays the business rescue process can now be completed and the mines reopened,” McChesney said.

“We can now put the Flaming Silver/SSC chapter behind us and concentrate on completing the transactional requirements for the sale of VGSA to Real Win. Real Win is a new special purpose vehicle formed by shareholders Pius Mokgokong, Zandile Mdanda and Lindani Dhlamini.

“As the outgoing shareholder, we are satisfied that they have the necessary qualifications, experience and financial capability to make a success of the VGSA and the South African assets, including Lily and Barbrook in the future.”

McChesney said the deal had received massive support from creditors, former employees and community members.

Arendse, however, was not happy that VGO had begun engaging with Real Win last year after a leak of an extract of VGO’s board minutes, dated March 12 2018. The mineral resources department approved the VGSA and Flaming Silver deal on December 21 2018.

The board minutes, signed by VGO secretary Wayne Kernaghan, read: “It was noted that Mr McChesney had circulated the offer received from Real Win Investments to acquire from Vantage Goldfield Limited the entire issued share capital of Vantage Goldfields SA and all shareholder claims for R50 million.

“It was resolved that McChesney be authorised to accept this offer on behalf of the company.”


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August 25 2019