Gold
Gold

The much publicised Lily gold mine in Barberton, closed since a pillar collapse in February 2016, will soon reopen its doors which a new owner who has major aspirations for the mine and the rest of the assets previous owner Vantage Goldfields held.

The Siyakhula Sonke Empowerment Corporation (SSC Group), held a media briefing today to introduce themselves as the new owners of Vantage Goldfields and to provide an overview of the Vantage Goldfields operations.

SSC Group is a Level 1 Black owned and controlled organisation, founded in 2005 by Fred Arendse, former Head of Transformation at Anglo Platinum. He invested his personal capital as well as his vision and determination into the creation of the corporation, 13 years ago.

Speaking at the media briefing, Arendse, also CEO of the SSC Group outlined the vision, strategy and prospects for Lily mine.

He highlighted that:

Immediate focus areas

  • Review short term operational plans to put the mines back into production – Done
  • Sequence of re-opening would focus on getting Barbrook mine back into operation, recommissioning the metallurgical plant and appointing a contractor to develop the new Lily mine access decline – Before the end of year
  • Appoint the necessary on-mine management capacity and start preparing the operational plans for the structured reopening of shafts and associated operations – In process
  • Engage with unions and employees on a programme for re-employment – In process
  • Consolidate the regional office and decrease the level of historical corporate expenses – In process
  • Engage with creditors on the payment of claims with the focus being on optimising working capital levels – Done
  • Evaluate the treatment of additional surface resources to complement working capital levels – Done, project being commissioned

Arendse mentioned that R250 million is required to take all three companies out of business rescue and that, the anticipated working capital required to operationalise the two mines and associated infrastructure is about R46.2 million.

Update on the Vantage transaction

The seller and the purchaser signed the closing agreement on 3 May and the Section 11 application was subsequently submitted to the DMR, seeking ministerial approval for the transfer of control in the company holding the new order mining and prospecting rights.

“We are engaging with the department and do not expect any unnecessary delays. The Section 11 transfer is the only remaining condition precedent between the seller and purchaser,” says Arendse.

Re-opening programmes

“We have already commenced our internal planning and risk assessment for Barbrook mine. Our plan is to re-open Barbrook first, before the end of the year. With the prior approval of the DMR, we undertook a reconnaissance visit in 18 June.”

“The purpose of the visit was to assess underground workings and any damage to equipment and infrastructure. I believe the acquisition of Vantage Goldfields will accelerate our strategy in becoming a premier gold mining operator and will give us a platform to showcase our integrated mining value offering, as the SSC Group.

The current approach with the recovery of the lamp house container and the search for the “remains” of the miners, is that a final decision can only be taken once the new Lily mine access decline has been developed and the area where the crown pillar collapse occurred has been accessed.

A number of considerations in the planned recovery would include locality and accessibility of the container as well as the safety of the team undertaking the activities.

The initial plan to start producing gold from Lily is to rework old slimes dams for gold. This could equate to about 10 000 oz of production in 2018 from the mine.

The build up thereafter will be about 35 000 oz in 2019 and just above 40 000 oz in 2020 from Lily says Mike McChesney, former CEO of Vantage Goldfields and corporate development manager for the SSC Group.

The decline is expected to take about seven to nine months to complete with the first blast scheduled for 5 February 2019.

There is also a plan to upgrade the Barbrook plant to improve recoveries and introduce a BIOX stream in 2020.

Who is SSC?

To date, the SSC Group has made investments in shaft sinking and contract mining companies, geological consultancies, bulk transportation, medical services, a human resources company, construction and other mining services, amongst others.

This has been a carefully calibrated strategy to build capacity. The SSC Group has also made small investments into platinum and mineral sands exploration. The SSC Group is now ready to make further investments into gold, backed by the appropriate technical, operational and financial skills to complement the range of services and capabilities already developed within the Group.