New majority shareholders of Vantage Goldfields SA have accused a creditors committee of having a “devious” plan to liquidate the company, despite their advanced plan to reopen two Mpumalanga gold mines.
Siyakhula Sonke Corporation (SSC) Flaming Silver SPV, a minerals and investment company, signed a R190 million loan agreement with the Industrial Development Corporation (IDC) last month to acquire a 74% stake in Vantage Goldfields SA, which owns Lily and Barbrook mines in Louisville, outside Barberton.
The two mines were shut and put under business rescue in 2016 after the entrance to the shaft of Lily Mine collapsed and buried three workers underground.
Lily Mines’ 900 workers and 100 from Barbrook lost their jobs, and the company could not pay R139 million owed to creditors.
However, the Barbrook Creditors Committee says it will not stop its Pretoria High Court application, due to be heard on May 10, to liquidate Vantage Goldfields because business rescue practitioner, Rob Devereux, has declined to provide “any proof whatsoever” that the funds have been secured.
“We are constantly advised agreements are private and confidential and cannot be made available to third parties. Without proof the funds have in fact been raised, the creditor cannot consider to stay the current liquidation processes,” said Barbrook Creditors Committee chairperson Dwaine Koch.
“Therefore, the business practitioner’s public statements and circulars that sufficient funding has been secured is nothing more than a figment of his imagination and a deliberate, willful attempt to mislead and misinform the public and employees,” Koch said.
SSC CEO Fred Arendse said the agreements would only be provided to the Pretoria High Court judge.
“We’ve ventilated that point quite extensively. Funding agreements are confidential and in our affidavit we’ve committed that all those documents will be made available for the judge, and I couldn’t put that in my affidavit if it is not true,” Arendse said.
“They have a devious agenda to force the company into liquidation, irrespective of consequences to all the people involved. The agenda is to force us to fail. We had a mass meeting last week to update people about our plans,” he said.
Arendse said Barbrook would be reopened in July and Lily Mine in November. “We’re planning properly and once in full production, we believe we can re-employ all the people,” Arendse said.
Koch said: “It’s an absolute joke. They have not even finalised the sale of shares, as far as we know. We say they must show us the agreement and proof of funds and we can stop the liquidation.”
According to the business rescue plan, Vantage Goldfields needs R310 million to reopen the two mines. Lily Mine needs a new shaft while Barbrook will be able to resume production as it is dependent on the bigger mine. SSC will top up the IDC loan with R120 million.
SSC came to Vantage Goldfield’s rescue after two Canadian companies withdrew their interest to invest following unresolved disagreements with the company.
The business rescue plan indicates Lily Mine would return to profitability within two months because it had 4.9 million tons of ore reserves that could be mined for the next 11 years.
In their fight, the creditors committee also reported Devereux to the Companies and Intellectual Property Commission, citing concerns over fraud and reckless trading in November. The matter is under investigation.
Koch said they reported Devereux because his plan contained “flaws and uncertainties.”
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER