The stalemate in the re-opening of Australian company Vantage Goldfield’s mine in Mpumalanga appears to be over after new business rescue plans were published.
The amended plans put Arqomanzi – an entity formed by Flaming Silver 373 (a subsidiary of Siyakhula Sisonke Corporation), and Taung Gold – in a better position to take ownership of Barbrook and Lily Mines in Louisville near Barberton.
Business rescue practitioners, Rob Devereux and Daniel Terblanche, published the amended business plans on June 25 in line with an order of the Mbombela High Court last year, which required the amendment of plans dated May 25 2016, February 16 2017 and August 6 2018.
The court made this ruling after Arqomanzi was successful in its application to be declared an independent creditor of Vantage Goldfields SA (VGSA).
Arqomanzi approached the court for this declaration after Standard Bank ceded all of VGSA’s loans amounting to R389 million to Arqomanzi. The company then became VGSA’s biggest creditor.
Arqomanzi has tabled an offer amounting to R472 million that aims to focus on re-opening the mines, settling with creditors and ex-employees, developing the Lily Mine, upgrading plant and infrastructure and creating much-needed employment opportunities.
Devereux confirmed this week that there was progress in the matter.
The two mines were shut down in 2016 after the entrance to Lily Mine collapsed - burying three workers underground - and since then the business rescue practitioners had been looking for an investment of R310 million. More than 1 000 workers lost their jobs.
“We’ve published the plans,” said Devereux. “Creditors will vote (on the plans) once Arqomanzi has completed its due diligence for which they have 60 days. It seems that everyone is positive.”
However, due to outstanding litigation and frosty relations between SSC and VGSA, it remains to be seen if VGSA will challenge the amended plans.
VGSA initially had a sale agreement of 74% of its shares to Flaming Silver, but cancelled the deal after claiming that the company had not produced proof of funds, which SSC denied. The matter is before court.
If the creditors vote in favour of the plans, and Arqomanzi takes over, the company plans to offer a 10% shareholding to the employees and community.
In a meeting with creditors on July 6, Arqomanzi indicated that, while development of the mine continued, it would recover the missing container in which three workers were buried when the mine collapsed.
The company said it would produce gold seven months after the business rescue plan.
Devereux said in the amended plans that there were 45 million tons of ore reserves, according to a study by Minxcon, which makes this a viable gold mining operation.