Business

Mineral resources department to mediate in ongoing impasse over sale of Lily Mine

2020-03-24 19:42

The department of mineral resources and energy has intervened in the litigation process that has stalled the reopening of two Mpumalanga gold mines and the retrieval of the bodies of three workers who were buried underground.

The department hopes to pursue the owner of Lily and Barbrook mines, Vantage Goldfields SA (VGSA), as well as Arqomanzi – an entity formed by Siyakhula Sisonke Corporation (SSC) subsidiary Flaming Silver 373 and Taung Gold – to reach an out-of-court settlement.

Arqomanzi has put in a solid R472 million offer to buy the mines, located in Louisville, near Barberton.

They were shut down on February 5 2016 when the entrance to Lily Mine collapsed.

But Vantage has been reluctant to sell to the company, preferring to sell to Real Win Investments instead.

The mines were shut down and were then placed in business rescue. Vantage initially cancelled a sale agreement it had signed with Flaming Silver, thereby precipitating court challenges from SSC.

Vantage claimed that Flaming Silver had not provided it with its proof of finances, after having signed a deal to buy a 74% stake in the company.

Department spokesperson Ayanda Shezi confirmed that the department was trying to mediate between the two companies to reach an out-of-court settlement.

“The department is concerned about the prolonged business rescue process and legal challenges emanating from the process, which have delayed all efforts to retrieve the container [the container office in which the three Lily Mine workers plunged down when the mine collapsed] and affording the affected families closure from this painful accident,” Shezi said.

Some former workers have been camping outside Lily Mine for 332 days at last count.

“To this end, the department is supporting a process wherein the concerned parties can settle out of court as this will enable the new owners to locate and retrieve the container. Once this has been fully agreed upon and mining resumes, efforts to retrieve the container will proceed.”

Fred Arendse, the CEO of SSC, said his company was committed to reaching a settlement but Vantage was unwilling.

“As usual, Vantage is delaying,” he said.

Attempts to get comment from Vantage CEO Mike McChesney failed.

Business rescue practitioner Rob Devereux was also unavailable to comment.

In the recent court battle, Arqomanzi won its application in the High Court in Mbombela to be declared Vantage’s creditor, after Standard Bank ceded the loan account that Vantage had with the bank to Arqomanzi.

Standard Bank ceded all of Vantage’s loans, amounting to R389 million, to Arqomanzi.

This put Arqomanzi in the driving seat to influence the acquisition of the mines as Vantage owed it money.

Vantage has appealed the court’s decision.

Vantage also claims that Standard Bank did not give it notice of its decision to cede the loan account, and even if the notice was given to dispose of its rights, the process was unfair and should be set aside.

The High Court in Mbombela declared the Vantage/Flaming Silver sale agreement null and void after 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.

SSC is appealing this case.

Since the closure, 1 000 workers have lost their jobs.

Some former workers have been camping outside Lily Mine for 332 days at last count, going underground to try to retrieve the container office that sank 60 metres underground while their three colleagues – Pretty Nkambule (22), Solomon Nyirenda (39) and Yvonne Mnisi (30) – were working.


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March 29 2020