Vantage Goldfields line up new investors after high court decision
Judgment was handed down in the Mbombela High Court, on Wednesday, in favour of Vantage Goldfields SA (Pty)Ltd, paving the way forward for new investors and stakeholders to engage with VGSA.
MBOMBELA-The Sales of Shares Agreement between the Vantage Goldfields (Pty) Ltd and Flaming Silver Trading 373 (Pty) Ltd was declared unenforceable by acting judge Hendrik Roelofse.
Fred Arendse, CEO of Flaming Silver entered into an agreement with VGSA, on November 1, 2017 to purchase a 74% stake in VGSA .Vantage Goldfields operates the Lily and Barbrook Mines, situated near Baberton in Mpumalanga.
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Disaster struck the Lily mine during February 5, 2016, when the mine collapsed after a centre pillar gave way and 90 miners became trapped. Mining operations never recovered and the mine became completely inaccessible. As a result MIMCO, a subsidiary of Vantage Goldfields, were unable to pay it’s debts and were placed under business rescue.
Business rescue practitioners of Vantage Goldfields and MIMCO were of the opinion that the mines had a reasonable prospect of being rescued, subject to funding being obtained, to restart operations according to the business rescue plans.
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The Sale of Shares Agreement entered into between Vantage Goldfields and Flaming Silver had certain conditions attached to it, which required financing to be procured on terms acceptable to Vantage Goldfields and its business rescue practitioners.
The conditions had to be met before January 31, 2018, or the agreement concluded would lapse and be null and void. Various extensions were agreed upon, in addendum’s attached to the principal agreement, between Vantage Goldfields and Flaming Silver, but Flaming Silver could not procure the necessary funding within the time limits set.
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Fred Arendse concluded the fourth Addendum, on October 31, 2018, which was done without the authority of Flaming Silver’s board. According to Section 66(1) of the Companies Act 71 of 2008, the affairs of a company must be managed by or under the direction of it’s board.
The fourth addendum to the sale of the Shares Agreement, dated November 1, 2017 was declared null and void and Flaming Silver was ordered to pay the costs of the main application. Mike McChesney, CEO of Vantage Goldfields, declared the ruling as a victory for VGSA, as it’s primary goal is to re-open the mines, pay creditors and remedy the suffering endured by ex-employees.
