New Lily Mine owners in High Court battle with Vantage Goldfields
Flaming Silver accused Australia-domiciled Vantage Goldfields and business rescue practitioners of frustrating its plans to reopen the Lily and Barbrooke mines last week.
Chief executive Fred Arendse previously said that Flaming Silver would open the mines, and it would start a recruitment drive.
Arendse told Business Report yesterday that Flaming Silver was unable to resume operations, despite providing proof that it had secured sufficient funds to reopen the mines and backing to allow proceeds to flow from creditors.
“We have a very straightforward six-month implementation rescue plan, with defined funding and timelines, and cannot execute our plan if Vantage Goldfields SA refuses to complete the transaction,” he said.
Arendse said the reopening of the mine was long overdue, given that the company had complied with obligations in terms of the sale-of-shares agreement, including securing R190million from the Industrial Development Corporation.
The Department of Mineral Resources granted section 11 approval on December 21, giving consent for Flaming Silver to acquire the shares.
“We are of the view that they wish to collapse our binding agreement to give way to a new deal to be made that will only benefit them, and it appears that they have something to hide. Their behaviour is inconsistent with an intention to reopen the mines, and the delay in the last three years bears testimony to that,” said Arendse.
In November 2017, Vantage Goldfields SA entered into an agreement with Flaming Silver, selling the shareholding and claims that Vantage Goldfields SA held in Vantage Goldfields Limited and Makonjwaan Imperial Mining Company.
Arendse complained that Flaming Silver’s progress had been hampered by the lack of co-operation from Vantage Goldfields.
He said the business rescue practitioners also undermined its investor due diligence.
Vantage Goldfields and the business rescue practitioners were not immediately available for comment.
In February, joint business rescue practitioners Dave Terblanche and Rob Devereux threatened to place Vantage Goldfields into liquidation after allegedly receiving no proof of funds to reopen the mine, despite several requests.
They also said the lack of post-commencement funds and the deterioration of the assets had been exacerbated by the fact that they did not know when the mines would open.
Devereux and Terblanche threatened to have Silver Trading liquidated.
“The unreasonable delays in respect of the implementation of the transaction between Vantage Goldfields SA and Flaming Silver are not acceptable,” they said.
Lily and Barbrooke were put in care and maintenance after three employees were trapped in an underground container, and operations at the mines ground to a halt three years ago.