Lily Mine narrowly escapes liquidation
Plans to revive Lily Mine have finally been cleared after the liquidation application brought against its sister mine, Barbrook, was withdrawn on Thursday, clearing the way for a takeover of the parent company, Vantage Goldfields, by the Siyakhula Sonke Corporation (SSC).
The Barbrook creditors rendered services to maintain the mine for the past two years but have not yet been paid, and last week a meeting to adopt the business rescue plan was disrupted when Lomshiyo residents demanded further consultation.
The meeting was supposed to secure the creditors’ approval for the deal between SSC and Vantage Goldfields.
A R320-million joint investment by the Industrial Development Corporation (IDC) and SSC, supported by Mineral Resources Minister Gwede Mantashe, is meant to restart mining operations.
Operations at Lily Mine and Barbrook, near Barberton in Mpumalanga, came to a halt after a pillar collapsed underground three years ago, which trapped and killed three workers: Pretty Mabuza, Yvonne Mnisi and Solomon Nyarenda.
Vantage Goldfields was then placed under business rescue.
This year Koch applied for Vantage Goldfields to be liquidated on behalf of Stevridge Mining and Rock Mining Machines. But the company’s business rescue practitioner, Rob Deveraux, has since secured a buyout from SSC, a majority black-owned mining firm.
In his latest attempt to stall the deal, Koch wrote to Deveraux and cited an anonymous report from a mining consultant, claiming that repairs to the tailings dam and tests from a reputable laboratory on the state of the mine are incomplete.
This report was used to argue that the deal could not be concluded until the report’s findings were addressed.
Koch also claims that Deveraux had purposefully removed the voting rights of the creditors to prevent them derailing the deal.
“In order to protect the interest of the creditors it was elaborated to bring an urgent application to interdict this meeting from taking place,” Koch wrote to the rock drilling and maintenance creditors at Barbrook.
Koch has been accused of deliberately stifling the takeover because he previously consulted for Galane Gold, whose bid to buy the mine failed. Now he has accused Deveraux of lying about the money raised from the IDC and demanded proof of the approved loan.
Deveraux hit back in his letter to Koch, disputing his claims of bias: “I have always acted independently and in the interest of the company. If this [my integrity] was such a concern, you have had 17 months to address it. Clearly it was not a concern to you when Galane was looking to purchase the mine.”
Finally, in a shock capitulation by Koch on Thursday, the liquidation application was withdrawn. The meeting with Lomshiyo residents is now expected to go ahead on Monday, when the deal will be finalised.