Taung Gold offers to buy Lily and Barbrook mines
The South African gold developer listed in Hong Kong made a conditional binding offer to the joint business rescue practitioners (BRPs) of Vantage Goldfields, Makonjwaan Imperial Mining and Barbrook Mines to acquire the mines in Mpumalanga.
It said if successful, the shareholding of the new venture would be itself, Siyakhula Sonke Empowerment Corporation (SSC).
Chief executive Neil Herrick said their offer was a viable alternative for the troubled mines. “Some of these assets have been in business rescue for more than three years and, earlier, the original business rescue plans were declared to have failed,” he said. “Given the two mines’ troubled history and the ongoing litigation relating to them, we believe our offer to the BRPs represents a viable alternative to deliver value for key stakeholders relatively quickly through the formulation and implementation of new business rescue plans.” Herrick could not disclose the amount of the bid.
Lily mine, currently owned by Australian company Vantage Goldfields, halted operations in Barberton following the ground fall incident in February 2016 in which three workers were trapped and whose bodies are yet to be retrieved.
The mine also fell into distress and was placed into business rescue, together with Lily mine, in April 2016.
The search and rescue mission has been suspended, because of unstable and highly dangerous conditions.
It will only be resumed once enough money is raised to complete a full geotechnical assessment of the stability of the open pit area and underground operations.
Last year, SCC took control of the mines and received R190million from the Industrial Development Corporation to restart them.
But Vantage Goldfields cancelled the sale of its shares in the mines to SSC Group and took SCC to court, saying that the buyer did not have enough funds to restart the mines and pay outstanding creditors.
Herrick said that key conditions of Newco’s offer were the completion of a due diligence, the adoption of new business rescue plans and the securing of all necessary regulatory approvals. He said the final consideration payable for the assets would be disclosed once the new business rescue plans had been adopted.
“Taung Gold and SSC both like the assets and believe that the potential exists to develop a business that is of value and purpose to its stakeholders and which will include the meaningful participation of the local community and employees,” Herrick said.
“Although the relationship between the two Newco shareholders is a recent development, SSC chief executive Fred Arendse and I have known each other for some time. We recognise the respective qualities of each company’s management.”
African News Agency (ANA)