Another setback for Lily and Barbrook mines with interdict
The reopening of the Lily and Barbrook mines is once again in the balance, as a court application which prohibits the business rescue practitioners from proceeding with their debt repayment proposal to creditors was brought.
BARBERTON – On September 25 the Gauteng Local Division of the High Court, held in Johannesburg, barred Robert Charles Devereux and Daniel Terblanche, in their capacity as the business rescue practitioners (BRP), from implementing the debt rescue plan adopted by the creditors of Vantage Goldfields (VGO), Barbrook Mines and Makonjwaan Imperial Mining Company (MIMCO).
The application was brought by Arqomanzi, which was created by the amalgamation by Siyakhula Sonke Corporation (SSC) and Taung Gold, to declare that the business rescue plans had failed as approved by the BRPs on May 25, 2016 for MIMCO, February 16, 2017 for VGO and August 6, 2018 for Barbrook Mine respectively.
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The Lily and Barbrook mines were placed under business rescue after disaster struck in February 5, 2016, when the Lily Mine collapsed after a centre pillar had given way. These mines became completely inaccessible and mining operations never recovered. As a result MIMCO, a subsidiary of Vantage Goldfields, was unable to pay its debts.
Last week Judge Mohamed Ismail ruled that the matter be re-enrolled for hearing on the urgent court roll on October 8 for final judgement on the relief claimed in Part A of the application brought. This entails a hearing with regards to the lifting of the moratorium on legal action against the mines under business rescue and interdicting and restraining the BRPs from implementing any of their plans.
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Mike McChesney, the CEO of VGO, stated that he cannot comment on the matter as it is sub judice and VGO is opposing the application.
Last month, SCC and its subsidiary Flaming Silver (FS), attempted to enforce a sales of shares agreement entered into between FS and VGSA on November 1, 2017, in an appeal application to the full bench of the Mpumalanga Division of the High Court. The appeal was dismissed with costs.
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The judgement paved the way for VGO to complete the sale of a 100 per cent stake in its wholly owned subsidiary VGSA to Real Win Investments (RWI).
It is alleged in a September 22 City Press article that Arqomanzi had provided proof of funds to the amount of R472 million by September 5, to reopen the mines and settle its debts to the satisfaction of the Barbrook and Lily mines Creditors’ Committee, while RWI opted not to declare its position.
McChesney argued that “the Barbrook and Lily Creditors’ Committee has no legal status and is merely a small group of frustrated creditors.”
Currently VGSA is also facing pending litigation in the Supreme Court of Appeal (SCA). The SCA was petitioned on the basis that FS is of the belief that acting judge Hendrik Roelofse erred in his judgement when he declared the agreement between VGSA and FS null and void.
VGSA filed its answering affidavit at the SCA on September 17, according to McChesney. He stated that his legal team awaits a response as to whether the application will be heard at all.
