- The ActionSA statement (0.19 MB)
Owner of the shut Barberton-based Lily gold mine, Vantage Goldfields, has countered claims made by political organisation ActionSA president Herman Mashaba that the mine has received two bids by third parties that intend to acquire and reopen the mine.
The Lily mine has been closed since a cave-in occurred near the entrance of a decline shaft in February 2016, which resulted in an above-ground lamp room container being pulled several tens of metres below ground and covered in debris.
Three miners Solomon Nyerende, Pretty Nkambula and Yvonne Mnisi were in the container at the time of the collapse. Rescue attempts failed to reach the container as ground conditions were unstable and volatile, ultimately leading to the abandonment of plans to attempt to reach it for the time being.
Subsequent to this, the mine remained closed and faced financial difficulty, leading to it ultimately going into business rescue in April 2016 after the then owner, Mimco (a Vantage subsidiary) declared it had no means of generating income.
After several failed attempts by third parties to acquire the mine in recent years, ActionSA noted in a statement on January 21 that the business rescue practitioner (BRP) of Lily mine had received receipt of two bids by potential buyers with an intent to reopen the mine.
According to ActionSA, both new bids intented to retrieve the lamp room container and re-employ some of the previous mineworkers.
However, Vantage CEO Mike McChesney tells Mining Weekly that the Lily mine “is not for sale” and that all previous attempts to sell the mine have failed because of nonperformance by the buyer or “self-serving interference”, including litigation by previous bidders in the business rescue process.
“Accordingly, Vantage has decided to retain ownership and fund the reopening of the mine,” he says.
To achieve this, McChesney says, Vantage has found a new investor – Macquarie Metals, which now owns 98% of Vantage in Australia. “This is an entirely independent company which does not include current management and will implement its own management structures in due course.”
As such, he notes that Vantage will implement the currently approved business rescue plans for both the Lily and Barbrook mines, with significant improvements which are being discussed with the BRP.
McChesney explains that the payment of creditors will be made according to the approved plans and says, in most cases, this will be R1 a share. The first payment of 65% will be paid within one month and the balance of 35% three months thereafter.
He tells Mining Weekly that the plan also provides for the reopening of both mines and, in the case of the Lily mine, a new decline shaft will be sunk to access the mine workings and recover the remains of the missing miners.
McChesney adds that recovering the missing miners has been part of the business rescue plan since April 2016.
In addition, he says that, when the plan is implemented, new employment opportunities will be created for those mineworkers who had been employed at the mine at the time of its closure.
Meanwhile, countering ActionSA’s claims that Vantage will be in contempt of court should it not publish the prescribed business rescue plan within the next seven days, McChesney says the business rescue process initiated by it is regulated by Chapter 6 of the Companies Act.
“In any event, it appears that ActionSA wants the same outcome that Vantage has be striving for – notably, to reopen the mines and to bring closure to the bereaved families. This has always been our objective and something we’ve remained committed to.”
Further, he states that allegations made by ActionSA that “mine management have had every reason to delay [business rescue] proceedings” are baseless and without foundation. “Nothing could be further from the truth".
McChesney adds that it is equally incorrect to make the "baseless and offensive claim" that he or any of the companies involved were found liable for the collapse in the first place. “This was a tragic incident that has resulted in great suffering but the formal enquiry set up to investigate the occurrence did not find liability, nor should it.”
To this extent, he says that whether or not there are grounds for prosecution is a determination made in a constitutional process and that any decision made thereto is a power of a court and not the opinion of a political slogan.
“The business rescue process, and hence the reopening of the mines, has been severely hampered by non-performance of previous bidders and subsequent interference and litigation in the process. Vantage has now remedied this and we will ensure that the mines are reopened forthwith,” concludes McChesney.