Vantage Goldfields CEO wanted Lily Mine inquiry report to be buried

2019-07-30 12:13

Vantage Goldfields SA (VGSA) CEO Mike McChesney allegedly tried to have an inquiry report into the collapse of Lily Mine in Mpumalanga “squashed”.

This is according to a complaint that Siyakhula Sisonke Corporation (SSC) CEO Fred Arendse has lodged with the department of mineral resources.

The mine collapsed on February 5 2016, burying a container office underground in which three workers – Yvonne Mnisi (30), Pretty Nkambule (22) and Solomon Nyirenda (39) – were trapped.

During a meeting on January 23 – according to Arendse’s letter to the department’s chairperson of the Lily Mine inquiry, Funwell Nkuna, dated June 21 – McChesney allegedly asked for Arendse’s “assistance to have the report squashed”.

“I can confirm that during the discussion … Mike McChesney requested my assistance to have the department of mineral resources report squashed as the report negatively implicated the directors of VGSA, including himself, and has the potential of resulting in prosecution,” the letter reads.

Arendse then undertook a polygraph test on May 30 to prove his claim.

The polygraph test was done by private security company TSU International in Centurion.

Arendse said in his letter that McChesney’s approach amounted to criminal conduct and asked that the matter be investigated.

Asked to comment, McChesney said: “I am certainly not going to respond to spurious allegations by Fred Arendse or anyone else.

“If Arendse wrote to Funwell Nkuna, you should ask him about it, not me.”

Mineral resources spokesperson Ayanda Shezi confirmed that the department had received Arendse’s complaint.

“The department responded to Mr Arendse by advising him to report the matter to the police as the allegations are of a criminal nature, and the department does not have jurisdiction over criminal matters,” Shezi said.

The department finalised its report on the Lily Mine disaster in March last year and submitted its recommendations for prosecution on the contravention of the Mine Health and Safety Act to the National Prosecuting Authority.


Arendse confirmed that one of their investors – Taung Gold International – had submitted a binding and fully funded offer to the business rescue practitioners to the value of R250 million.

The offer, he said, focused on the reopening of the mines, settling with creditors and former employees, sinking the Lily Mine decline, upgrading plant equipment and infrastructure and creating much-needed employment opportunities.

Arendse said the R250 million would be augmented by a R190 million loan from the Industrial Development Corporation that SSC obtained, and another R32 million from a London Stock Exchange- and JSE-listed company.

This means that the offer is R472 million in total. Taung Gold International and SSC have formed a new company, Newco, in their bid to take over Lily and Barbrook mines.

Taung Gold International CEO Neil Herrick said: “Taung Gold and SSC both like the assets and believe that the potential exists to develop a business that is of value and purpose to its stakeholders, and which will include the meaningful participation of the local community and employees.

“Although the relationship between the two Newco shareholders is a recent development, SSC CEO Fred Arendse and I have known each other for some time,” Herrick said.


Meanwhile, SSC has filed papers in the Mpumalanga High Court for leave to appeal the court’s judgment last week that declared the sale agreement null and void.

The court did not make a ruling on SSC’s alleged lack of funds and its main application to force VGSA to hand over the shares as per the agreement, but ruled in favour of former SSC director, Ferdi Dippenaar, who applied to declare the signing of a fourth addendum to the sale agreement null and void.

Dippenaar argued that the meeting during which the resolution was made regarding the addendum was not correctly constituted – a point SSC disputes.

The judgment automatically collapsed the deal.

McChesney announced after the judgment that VGSA would be approaching the department of mineral resources with a proposal on the way forward, and had scheduled meetings with new investors to conclude the sale.

After the collapse in 2016, Lily and its sister mine, Barbrook in Louisville near Barberton, were shut down and put under business rescue to source a R310 million investment to reopen them.

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May 31 2020