The business rescue practitioners (BRPs) of emerging gold producer Vantage Goldfields, in a February 15 amendment to the adopted business rescue plan, state that they have received an offer from Vantage to provide the capital required to self-fund the process of reopening the Lily and Barbrook mines, in Mpumalanga.
The commencement of the amended plan, which came into effect on February 15, makes reference to the proposed reopening of the Lily mine by July 2.
Vantage CEO Mike McChesney says that because these plans have already been adopted by creditors, the process is quick and there is no need to present and consider new plans.
For the necessary funding to be made available to the company, the BRPs − Rob Devereux and Daniel Terblanche – state that Vantage requires the adopted business rescue plan to be amended to reflect that all approved secured claims, approved post amendment funding claims and approved preferent claims will be discharged by means of a payment to such creditors of an amount equal to 100% of their approved claims.
As such, all creditors will be paid R1 a share (expect for Vantage subsidiary, Makonjwana Imperial Mining Company [Mimco] concurrent creditors who will receive 30c apiece as per the approved plan) with 65% of all the approved claims to be paid to the relevant creditors within 15 business days of the effective date of the amendment to the business rescue plan.
In addition, the balance of 35% will be paid within 60 business days of the effective date of plan.
All approved concurrent creditor claims will be discharged by means of a payment to such creditors of an amount equal to 30% of their approved claims, with 65% of all the approved claims to be paid to the relevant creditors within 15 business days of the effective date of the plan and the balance to be paid within 60 business days of the effective date of the plan.
The first tranche of payments to creditors will commence immediately and be completed by March 8.
McChesney previously told Mining Weekly that the Lily and Barbrook mines were not for sale and that the company intended to retain ownership and self-fund the reopening of both mines. He added that all previous attempts to sell the mine had failed because of nonperformance by potential buyers or “self-serving interference”, including litigation by previous bidders in the business rescue process.
The BRPs state that, by amending the adopted business rescue plan, they would be acting reasonably in so far as the amendment will result in the necessary funding being made available to Vantage to enable it to pay the approved creditors the amounts stated in the adopted plan.
They also note that the amendment is beneficial and not prejudicial to affected persons, since the amendment will result in the implementation of the adopted business rescue plan.
Details of the planned production ramp-up will be provided once this process has been fully assessed, McChesney tells Mining Weekly. However, he notes that, after having sat dormant for five years, ground conditions at both mines would have likely deteriorated and it may take some time for re-entry to be carefully planned.
“The re-employment of former employees will commence as soon as possible so that these long-suffering people and their communities can resume normal working lives,” says McChesney.
BACKGROUND
Mimco operated the Lily mine at the time when a cave-in occurred in February 2016 – an event in which an above-ground lamproom container, in which three miners were working at the time, was pulled into a hole at the entrance to the decline shaft of the mine.
As a consequence, the three miners − Solomon Nyerende, Pretty Nkambula and Yvonne Mnisi − went missing.
Subsequent to the event, rescue attempts failed to located the container owing to unstable ground conditions and risk to rescuers.
The incident and failure to reach the container to date has meant that Vantage went into business rescue as capital from Lily operations stopped. This also impacted Vantage’s operation of its Barbrook mine, also in Barberton, which subsequently also closed with commencement of the business rescue procedure.
To achieve the self-funding required to open the mines, McChesney previously said, Vantage 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.
“Vantage is very excited by this development and 2021 promises to be a good year for the company and its many stakeholders,” McChesney tells Mining Weekly.