Mining investment company Arqomanzi and its empowerment partner, consultancy Siyakhula Sonke Empowerment Corporation (SSC), have welcomed a Supreme Court of Appeal ruling that dismisses an appeal by gold miner Vantage Goldfields with costs.

The companies say the ruling marks a step forward in the long-standing case regarding the business rescue of the Lily and Barbrook gold mines, in Mpumalanga.

The court upheld an order by the High Court dated October 2021 in its dismissal of Vantage’s appeal.

The central issue in question related to restraining the business rescue practitioners (BRPs) of the three companies from implementing amended business rescue plans.

Despite the period of seven years that has passed since the Vantage companies entered into business rescue, it is acknowledged that these companies are still viable for rescue.

By dismissing Vantage’s appeal, the court has confirmed that Argomanzi lawfully acquired loan claims against Vantage and Barbrook Mines from Standard Bank, as well as that Arqomanzi is an independent creditor of both Vantage and Barbrook Mines.

The court also determined that only R14-million of Arqomanzi’s loan claim against Vantage had been subordinated and only R17-million of Arqomanzi’s loan claim against Barbrook Mines had been subordinated.

The acquisition of Vantage Goldfields Limited (Australia) by Macquarie in 2020 required consent from South Africa’s Minerals Resources and Energy Minister under Section 11 of the Minerals and Petroleum Resources Development Act.

Consequently, the mining rights held by Makonjwaan Imperial Mining Company and Barbrook Mines remain inoperable until the Minister grants Section 11 consent.

Vantage Goldfields and the BRPs are now permanently prohibited from stating that the Ministerial consent was not required, states Arqomanzi.

Moreover, the court affirmed that the original business rescue plans, adopted after the Lily mine collapse, were independent, had failed and could no longer be implemented.

As a result of the appeal dismissal, the mining rights cannot be operated by Vantage or any other entity until the Minister grants consent.

Arqomanzi and SSC believe the mines’ safety record will adversely affect Vantage’s chances of obtaining such consent.

The BRPs must now present new business rescue plans to creditors for consideration and adoption, for which drafts have already been prepared.

Vantage CEO Mike McChesney responds by saying that the Supreme Court of Appeal has provided clarity to allow the Vantage Goldfields investor group to be able to access its R450-million in secured funding to progress the way forward for the companies in business rescue.

“We look forward to the long-awaited reopening of the mines,” he says.

Arqomanzi, meanwhile, is urging all creditors to carefully consider that Vantage has lost three cases in the High Court and now two appeals by the Supreme Court.

“Over seven years, Vantage has demonstrated no efforts to support its former employees and the community. We remain committed to our plans of reopening the Lily and Barbrook mines, as well as providing closure to the affected families of the Lily mine collapse,” says SSC CEO Fred Arendse.

The Lily and Barbrook mines have been shut since February 2016, following the Lily mine collapse that trapped and killed three mineworkers.