Despite a rescue plan approved by creditors. From Moneyweb.
It’s nearly six years since a support pillar at Vantage Goldfields’ Lily Mine in Mpumalanga collapsed, taking the lives of Solomon Nyirenda, Yvonne Mnisi and Pretty Nkambule. The company subsequently placed the Lily Mine in business rescue.
The bodies of the three workers remain buried 50 metres underground at the site. All this time the families have been waiting for the mine to reopen so they can claim the remains of their loved ones.
In February this year it seemed the long wait was over, when it was announced that Australian group Macquarie Metals would come to the rescue of Vantage Goldfields, which owns both the Barbrook and Lily mines.
Read: Australian group Macquarie Metals comes to rescue of Vantage Goldfields
Vantage Goldfields CEO Mike McChesney said Macquarie Metals would settle the R212 million owed to creditors and recommence mining operations by July this year.
The first order of business would be to sink a decline shaft and retrieve the bodies of the deceased workers. The plan was approved by the business rescue practitioners (BRPs), Rob Devereux and Danie Terblanche.
McChesney’s optimism seems to have been premature.
Arqomanzi, which is a (disputed) creditor making a hostile bid for the assets of Vantage Goldfields, was successful in interdicting the BRPs from implementing their plans. At this point, it is unclear when mining operations will recommence.
‘Fake’ letter
Earlier this month, Arqomanzi put out a statement claiming it had uncovered fraud relating to a letter of funding being put up by Macquarie Metals shareholder Africa Pacific Capital.
The letter formed part of the proof of funds on which the business rescue plan was predicated. Arqomanzi says it was suspicious of the letter and wrote to HSBC in Hong Kong to establish its provenance.
“On 30 September 2021, in an astonishing turn of events, Arqomanzi received written notification from HSBC in Hong Kong that the letter was not issued or sent by HSBC Hong Kong,” says the Arqomanzi statement.
Had it not been for this “fake” letter being used to mislead the courts, the mines would be operational by now and the recovery of the container with the bodies of the deceased workers would have been well underway, as would the reopening of the mines, according to Arqomanzi.
These are serious allegations requiring a serious response.
Vantage Goldfields put out a statement of its own disputing Arqomanzi’s interpretation of the “fake letter”, saying no bank would provide details about its customers in the way suggested by Arqomanzi.
Frustrating the process
“In any event Vantage has the necessary funding to complete the business rescue process but implementation of the approved plans has been impeded by Arqomanzi,” says Vantage in its response.
It goes on to say that plans to reopen the Lily and Barbrook mines and retrieve the bodies of the deceased workers have been impeded, not by Vantage, but by Arqomanzi.
“Unfortunately this continues to be delayed and frustrated by Arqomanzi’s incessant litigation,” it adds.
“Arqomanzi and its collaborator SSC [Siyakhula Sonke Empowerment Corporation] have been litigating with the Vantage group for more than three years, in six different actions, starting with an unsuccessful action by SCC when it attempted to acquire the Vantage companies but was never able to produce the funding to do so. Vantage believes all their claims will be shown to be unmeritorious.
“These actions have been aimed at stalling and delaying the rescue of the Vantage companies, to the detriment of employees, creditors and the community.”
Read:Dog fight over the carcass of Vantage Goldfields
Moves to reopen Lily and Barbrook gold mines
Surreal happenings around Lily and Barbrook sale
The Vantage statement says Arqomanzi does not have valid business rescue plans, nor does it have the funding required.
“Arqomanzi’s actions are just futile delaying tactics with no clear rescue plan to proceed. Employees and others who sold their claims to Arqomanzi are unlikely to ever see their money from Arqomanzi.”
History of litigation
Earlier this year, Arqomanzi succeeded in its attempt to interdict the BRPs implementing their rescue plan for the mines. That ruling by Mpumalanga High Court Judge President Francis Legodi is currently on appeal before the Supreme Court of Appeal in Bloemfontein.
Arqomanzi says it will now lay criminal charges in SA, Australia and Hong Kong relating to the so-called fake letter, and will report the matter to the relevant regulatory authorities.
Following that ruling, Arqomanzi approached the court a second time to determine what percentage of voting rights it held in the business rescues of Vantage Goldfields (VGL), Barbrook and Mimco (which owns the Lily mine) so that it can participate in the vote on the plans.
It is also asking the court to confirm whether Section 11 approval is needed for a change of ownership in terms of the Minerals and Petroleum Resources Development Act (MPRDA). The BRPs say this is not needed.
On July 29, Arqomanzi launched a new application to hold the BRPs in contempt of court for supposedly violating previous court judgments putting a freeze on implementing the rescue plans.
It is asking the court to impose a fine of R1 million on the BRPs and to suspend any fees due to them after July 25, 2020.
On August 4 this year, the BRPs launched a counter-application challenging certain aspects of judgments previously issued by Legodi and Judge Henk Roelofse, which put a freeze on their ability to implement the business rescue plan.
The BRPs want certain clauses of the judgments declared null and void, and an order prohibiting Arqomanzi from attempting to amend the already approved business rescue plans. This matter is set down for hearing on November 18.
