THE fight over the ownership of the mothballed Lily and Barbrook mines in South Africa’s Mpumalanga province took another turn on Friday after the High Court ordered business rescue practitioners (BRPs) to act lawfully.
Arquomanzi, a privately held company run by mining veteran Neil Herrick, formerly CEO of gold mining junior firm, Taung Gold International, said the court order clears the way to a decision on whether his firm can proceed with the takeover of the mines.
Lily was closed in 2016 following a tremor and rockfall which claimed the lives of three miners, the bodies of which have yet to be recovered.
According to a report by a City Press article earlier this month, Arqomanzi was in pole position to buy the two mines from its previous operator Vantage Goldfields after making a R250m bid to Robert Devereux, one of the BRPs. Arqomanzi had previously agreed with Standard Bank to cede it a R389m loan held over the assets.
During the process of having its bid approved by creditors, however – of which Arqomanzi is now one, post the agreement with Standard Bank – Vantage Goldfields compiled a takeout offer of its own supported by Macquarie Metals.
Herrick said in a statement on Sunday that Vantage Goldfields has been reticent to hand over details of its bid to creditors. It considered this position obfuscatory, hence last week’s court action which may result in taking the matter forward.
Arqomanzi said today Vantage, like Arqomanzi, cannot proceed with its plans to re-open the mines without the approval of the Department of Mineral Resources and Energy. This is in terms of the provisions of Section 11 of the Minerals and Petroleum Resources Development Act, it said.
Said Herrick: “It is implicit in the court order that the BRPs acted unlawfully in attempting to unilaterally implement Vantage’s proposal without giving creditors the opportunity to consider such proposal and exercise their vote.
“This is the second time in just over 12 months that Vantage and the BRPs have together acted opaquely, forcing Arqomanzi to implement legal steps to protect it rights and those of the body of creditors as a whole.”
“As matters stand right now, Arqomanzi has not only matched Vantage’s offer to trade creditors of 100 cents in the Rand but will also pay 50 cents in the Rand to the former employees (concurrent creditors) of Lily mine – 20 cents (67%) more than Vantage – and will settle all payments within 45 days, not 60 days.”
