Lily and Barbrook sale is cancelled

BARBERTON – Since the Lily Mine disaster in February 2016, operations have ceased.

Both mines have been placed under business rescue in an effort to restart operations.

Lowvelder previously reported that Flaming Silver announced that it had secured a loan of R190 million from the IDC to reopen the mines.

Mike McChesney, CEO of Vantage Goldfields Ltd, said in a statement that the agreement between VGSA and Flaming Silver Trading 373 was cancelled by VGSA. “

Read More: Creditors question Lily Mine loan

Flaming Silver, a subsidiary of the SSC Group, has failed to provide the funds required to reopen the mines and pay outstanding creditors through the business rescue process, despite having had more than 16 months to do so,” he said.

The sale of shares agreement was signed on November 1, 2017.

“The main purpose, as between VGSA, Flaming Silver and the business rescue practitioner, was to complete the business rescue process and reopen the mines.

Flaming Silver and the SSC Group have consistently represented to VGSA and the business rescue practitioners that they have secured the necessary funding but this has not been forthcoming, despite assurances that the funds would be made available.”

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McChesney added that Flaming Silver had received Section 11 consent from the minister of mineral resources, but that it was subject to the terms of the underlying agreement being completed in accordance with its terms.

“Consequently the board of VGSA, having given due notice to Flaming Silver in terms of the agreement, resolved to cancel the agreement in the interest of creditors, exemployees and the communities involved.

“The cancellation paves the way for VGSA to engage with alternative investors and to conclude a rapid financing solution for the reopening of the mines. Discussions in this regard are well advanced and will be implemented in terms of the business rescue process,” McChesney concluded