JOHANNESBURG (miningweekly.com) – Trade union Solidarity on Monday said the cancellation of another proposed buyout of the troubled Lily and Barbrook mines was a major setback that reinstilled further uncertainty for the mines’ workers and the surrounding communities.
TSX-listed Galane Gold and Lily mine owners Vantage Goldfields terminated the binding acquisition agreement for the Mpumalanga assets at the eleventh hour last week after Vantage failed to meet the conditions set out in the initial letter of intent.
With Vantage not in a position to sign the acquisition agreement, Galane, which had provided an extension five times, decided not to offer another extension.
“Vantage has been unable to meet the conditions in the letter of intent for a variety of reasons, despite their best efforts and we, therefore, have no option but to terminate our discussions,” said Galane CEO Nick Brodie in a statement last week.
“It is now time for the creditors and Lily workers to investigate the pros and cons of a liquidation process against business rescue,” said Solidarity general secretary Gideon du Plessis, pointing out that the entire community has remained in limbo over the past 18 months.
With every failed transaction, it took six months before a next potential investor or buyer appeared on the scene, he pointed out.
The now-abandoned acquisition of Vantage would have resulted in the mines under business rescue becoming operational within 100 days and creditors and workers starting to receive their outstanding payments.
However, Du Plessis pointed out that Lily’s top management was investigating two other options.
“Certainty about what the future holds is also important because, until now, only false hope has been created for the workers, and it is no use to delay the inevitable if the worst case scenario will eventually come to pass,” he said.