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Are Lily, Babrook mines being stripped before they change hands?

2019-09-06 15:53

Former employees of the closed Lily and Babrook mines in Mpumalanga have claimed that the business rescue practitioner has neglected the mine’s assets and say they have seen trucks moving from the mines – a sign they were being stripped.

The mines’ ownership is the subject of a judicial process but Vantage Goldfields Limited has announced that Real Win Investments (Pty) Ltd has bought 100% of its shares.

In the meantime, Siyakhula Sonke Empowerment Corporation’s subsidiary, Flaming Silver 373 (Pty) Ltd, is challenging Vantage Goldfield’s decision of cancelling its sale agreement signed on November 1 last year.

The mines, situated in Louisville near Barberton, were closed in 2016 and put under business rescue after an entrance to Lily Mine collapsed and buried three workers who were in a container office.

Harry Mazibuko, one of the employees who had spent 130 days camping at Lily Mine to put pressure on the owners, said that trucks had been loading machines and driving away.

“These trucks have been coming to strip the plant, particularly at Babrook. We have phoned the business rescue practitioner (Rob Devereaux) about this but he said he would investigate,” Mazibuko said.

“We’re worried about this. We’re waiting for the re-opening of the mines and to get paid the monies that Vantage Goldfields Limited owes us, but they are now being stripped. At the same time, Real Win Investments has not spoken to us and the community since Vantage Goldfields Limited announced them as the new owners,” he added.

Devereaux did not respond to written questions.

Mazibuko said that the workers would prefer Flaming Silver to take over the mines because they had committed to retrieving the container office and reemployeeing the 1 000 former employees.

He said that they did not have a written plan from Real Win Investments.

“During a creditors meeting this week, they made a handwritten presentation that did not specify how much they would spend to re-open the mines. We’re not satisfied with the business rescue plan and we must be given a right to vote and choose the company that we want,” Mazibuko said.

Real Win Investments chief executive Zandile Mdanda did not return City Press’ calls.

Real Win cannot take over ownership of the mines as yet after Flaming Silver’s application to the Supreme Court of Appeal to overturn a Mbombela High Court decision that found that the sale agreement was null and void because a board meeting that made a decision about a fourth addendum to the sale agreement was not properly constituted.

Flaming Silver’s former director, Ferdi Dippenaar, brought an application to alert the court to this when the company had brought an application to force Vantage Goldfields Limited to hand over share documents in line with the sale agreement.

SSC considers legal action

Siyakhula Sonke Empowerment Flaming Silver chief executive, Fred Arendse, has accused Vantage Goldfields SA of using an offshore company, Vantage Goldfields from Australia, to circumvent their Section 11 approval with the department of mineral resources. This effectively gave the transaction between Siyakhula Sonke Empowerment and Vantage Goldfields SA the go-ahead.

“Accordingly, Flaming Silver are considering instituting legal action against, inter alia, the afore-mentioned entities and responsible persons,” Arendse said.

“We are of the opinion that any transaction to sell the shares by Vantage Goldfields SA or Vantage Goldfields Limited is likely to be a long, drawn-out matter as a result of the ongoing litigation involving Flaming Silver and Vantage Goldfields SA. Furthermore, Flaming Silver has obtained Section 11 ministerial approval, hence Real Win cannot ownership of these mining assets,” he added.

Vantage Goldfields SA chief executive, Mike McChesney, said Siyakhula Sonke Empowerment kept blaming everybody else but they had not performed.

“We haven’t circumvented anything, because Section 11 consent is not a legal document in terms of any commercial agreement. We’re free to deal with our assets as we see fit, and we have brought a new investor who has the money to open the mines and pay all the creditors,” McChesney said.

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December 15 2019