The opening of two Mpumalanga gold mines – Lily and Babrook – is set to be delayed once again after Vantage Goldfields SA lodged an appeal against the latest judgment that made a bidder for the mine’s ownership the biggest independent creditor of the company.
Arqomanzi – an entity formed by Siyakhula Sisonke Corporation subsidiary, Flaming Silver 373 and Taung Gold – won its application in the Mbombela High Court early this month 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 because Vantage owed it money.
Arqomanzi had made an offer worth R472 million to business rescue practitioners Rob Devereux and Daniel Terblanche to take over the mines but Vantage preferred Real Win Investments with whom it concluded a deal.
Vantage’s chief executive officer, Mike McChesney, declined to comment but City Press has seen the company’s court papers for leave to appeal.
“Sorry, we don’t conduct our business in the press,” McChesney replied by text message.
Vantage wants to overturn acting judge Hendrik Roelofse’s decision and claims that it has a reversionary right of the loan account.
“Arqomanzi’s rights are the same (and no better than) Standard Bank’s rights viz-a-viz Vantage-Arqomanzi did not accordingly become the out and out owner of the loan account, and all right, title and interest in and to the loan account do not vest in Arqomanzi. Whatever rights it may now have remain subject to Vantage’s reversionary interest,” reads Vantage’s papers.
Vantage also claims that Standard Bank did not give them a notice of its decision 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.
“Vantage’s reversionary right is preserved at all times which means that the moment the company’s debt (to Standard Bank) is paid, the pledge (loan account) reverts in full ownership to Vantage,” reads the papers.
Siyakhula Sisonke chief executive officer, Fred Arendse, said: “This is just another delaying tactic from Mike McChesney to the detriment of thousands of people, including the community.”
The relationship between Arendse and Vantage deteriorated when Vantage decided to cancel the sale agreement it had with Flaming Silver 373 to a 74% stake in the company. Vantage claimed that Flaming Silver did not have money to re-open the mines. The mines require R310 million.
The Mbombela High Court declared the 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.
Siyakhula Sisonke is appealing this case.
Lily and Babrook mines were placed under business rescue in 2016 when an entrance to Lily Mine collapsed – leading to the closure of the mines and 1000 workers losing their jobs.