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Vantage Goldfields liquidation postponed

The liquidation of Vantage Goldfields SA has been postponed for another two months – giving the new company owners a chance to convince creditors that they are ready to reopen two Mpumalanga mines.

Vantage Goldfield SA’s two sister mines – Lily and Barbrook in Louisville near Barberton – were mothballed in 2016 and placed under business rescue after the entrance to the shaft of Lily Mine collapsed and buried three workers.

Barbrook, a smaller operation that relied on Lily Mine, was forced to shut down after experiencing financial distress when Lily Mine stopped operating following the force majeure.

Creditors who are owed R139 million approached the Pretoria High Court to liquidate the mines when it appeared that business rescue practitioner Rob Devereux was struggling to get a R300 million investment to reopen the mines. The R300 million was needed to open a new shaft at Lily Mine and also retrieve the bodies of Yvonne Mnisi, Pretty Nkambule and Solomon Nyerende.

Siyakhula Sonke Corporation (SSC) Flaming Silver SPV – a minerals and investment company – signed a R190 million loan agreement with the Industrial Development Corporation last month to acquire a 74% stake in Vantage Goldfields SA.

Despite this step, the creditors have remained unconvinced that these mines could be reopened and they have not withdrawn their application for liquidation.

The court, sitting in Mbombela, postponed the matter to July 31 at the request of Vantage Goldfields for discovery of certain documents.

However, Barbrook creditors’ committee chairperson Dwaine Koch insisted that they would not withdraw the application until they were assured that funds had been secured to resume operation of the mines.

SSC CEO Fred Arendse announced on May 4 that the agreement for his company’s acquisition of 74% of Goldfields had been signed. The outstanding matter, said Arendse, was the approval by Mineral Resources Minister Gwede Mantashe.

“We don’t forsee any problem because the company has landed in the hands of black people. That agreement is closed and the only outstanding thing is the ministerial consent that relates to change of control … there are no other conditions to be satisfied,” he said.

Koch still maintains that SSC’s announcement was “meaningless” and questioned why Vantage Goldfields requested a postponement.

“That announcement is meaningless to us because it doesn’t say whether we’ll be paid or what. Another issue is that if they have the funds why did they ask for postponement of the case?” Koch said.

“When we asked for proof of the money, they said they could only give it to the court,” Koch said.

Since the two mines’ closure about 1 000 workers have lost their jobs and the economy of Louisville has suffered a battering as most households relied on the mines and small businesses are struggling.

The Louisville community is divided on whether the company should be liquidated. Some community members support the creditors, while others support SSC and the Association of Mineworkers and the Construction Workers’ Union.

The business rescue plan is positive about the prospects of Lily Mine. It indicates that Lily Mine has 4.9 million tons of ore reserves that could be mined for the next 11 years.

The mine can return to full profitability within two months, the plan says.

The Barbrook creditors committee reported Devereux to the Companies and Intellectual Property Commission last November, citing concerns about fraud and reckless trading.

Koch said Devereux’s plan contained “flaws and uncertainties”.

The matter is still under investigation.

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