gold

The Siyakhula Sonke Empowerment Corporation and its subsidiary, Flaming Silver Trading 373, collectively known as the SSC Group has taken note of the recent media articles that Vantage Goldfields Limited has accepted a conditional offer from an alternative bidder, Real Win Investments, for a 100% shareholding in and claims against Vantage Goldfields South Africa.

This content has been released to the media by the Siyakhula Sonke Empowerment Corporation

Based on a well-known sequence of events commencing late in 2018 and, more recently, from disclosures in media articles including comments from directors of both VGSA and RWI, SSC Group has reason to believe that, inter alia, VGSA and RWI may have colluded to collapse Flaming Silver’s transaction with VGSA to facilitate the RWI Transaction, for which an agreement was signed on 12 March 2019, 2 days before we met at the Director-General’s office, yet failed to disclose this material detail at the meeting and despite still having an existing binding contract with us.

In addition, they tried to circumvent our Section 11 approval, by signing an agreement with RWI using their offshore company, VGO.

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Accordingly, Flaming Silver are considering instituting legal action against, inter alia, the aforementioned entities and responsible persons.

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On 26 August 2019, Flaming Silver lodged a petition to the Supreme Court of Appeal requesting leave to appeal the judgment of 17 July 2019, having already served the petition on the Respondent’s in the matter, inter alia, VGSA and Ferdi Dippenaar.

This has the effect that the matter once again becomes sub judice.

This means that the judgment of 17 July 2019 and 6 August 2019 is stayed pending this application being heard in the SCA and that Flaming Silver’s
transaction is revived, as a result of which Vantage cannot transact with any other party until such time as the matter has been adjudicated upon by the SCA.

The application is brought on the basis that Flaming Silver is of the belief that Acting Justice Roelofse erred in his judgment and that there is a reasonable prospect that the SCA will come to a conclusion different to that arrived at by him.

His judgment is based on, inter alia, the occurrence of a non-issue, that being the occurrence of a board meeting of the Flaming Silver board on 1 November 2018 at which the resolution was taken.

We respectfully disagree with this decision due to the fact that the meeting on 1 November 2018 never took place and because we believe the resolution was taken by round-robin on 31 October 2018 and that the correct procedure was followed as required in accordance with the Companies Act.

A notice was sent out to all directors by electronic mail, to which Mr. Dippenaar replied - “I cannot support this resolution”.

The resolution was passed by the remaining majority of the directors. This does not mean that Flaming Silver disrespects the courts or their decisions, and took careful legal advice before exercising its right to petition the SCA for leave to appeal the court’s judgment.

Commenting on the RWI transaction, SSC Group CEO Fred Arendse says:

“Given the tragic and painful history of the mines, over a period of more than three years, we believe that the recent binding offer made by Taung Gold International to the business rescue practitioners represents the only viable alternative to the imminent liquidation of the three companies.

"The fully funded offer is underpinned by their own financial resources and their pertinent operational background in the South African gold mining industry.

"At this point in time, it is also the only company that can deliver value for key stakeholders through the rapid formulation and implementation of new business rescue plans”.

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SSC notes and welcomes the announcement, on 21 August 2019, through which the BRPs have now notified the creditors, of the three companies, that they intend to hold a meeting of creditors on 4 September 2019 at which the creditors will be requested to approve the development of such new business rescue plans.

“We are of the opinion that any transaction to sell the shares by VGSA or VGO are likely to be a long, drawn-out matter as a result of the ongoing litigation involving Flaming Silver and VGSA," continues Arendse.

"Furthermore, Flaming Silver has obtained Section 11 Ministerial approval in terms of the MPRDA, hence RWI cannot claim ownership of these mining assets.”

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Furthermore, SSC notes that the announcement by VGO / VGSA comes more than 40 months after the initial tragic accident, but within a week of TGIL’s offer to the BRPs, which specifically focuses on creditors, ex-employees and the interest of communities, and neither VGO nor VGSA will receive any consideration from them in respect thereof.

Whilst VGO claims that RWI has secured the required funding, it has chosen not to disclose the source, status and conditionality of such funding and/or provide proof of such funding.

SSC has become aware, as recently as March 2019, that the PIC will be funding this Group/Consortium in the amount of R350 million for their transaction, and that consideration in the amount of R50 million will be received by VGO (as opposed to the R10 million that VGSA would receive in our transaction), an Australian registered entity, whose beneficiaries include the very directors who oversaw the demise of VGL, MIMCO and Barbrook.

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It must be noted that these happen to all be white people and not a single black individual is benefiting from this consideration.

SSC has verified the consideration of R50 million and it is in possession of all relevant documentation, dated as far back as the beginning of 2019 and, in particular, 12 March 2019, to prove this.

In addition, the funding is conditional upon SSC's current binding transaction being collapsed.

SSC has raised its concerns to the PIC, to which we are currently awaiting a response, given its ongoing woes and Commission of Inquiry, and cannot believe that it would be a party to such an abuse of public money through the direct and/or indirect rewarding of individuals who are currently under investigation and subject to potential prosecution for causing a tragic accident, where 3 black employees lost their lives, and thousands of black families continue to suffer as a result of the collapse at Lily Mine. SSC waits on their response in this regard.

These Mines have deteriorated substantially under the leadership of the management of the current BRP’s for more than 3 years now, and with an increase in illegal mining activities and the stripping of the Mines Assets.

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It has now been confirmed that the VGSA directors have untoward
reasons that are motivating their resistance to complete our transaction, and they should not be allowed to profit from such devious intentions that are causing a devastating effect on many vulnerable people, especially the ex-employees, communities and the affected families.

The Vantage Group directors have made a number a claims, on various platforms, including in a meeting with the Director-General: Department of Mineral Resources, about SSC's lack of funding and technical ability, which now appears to be a calculated smoke screen in their determined and planned attempt to collapse its transaction.

In considering this, it is important to note that RWI is a shelf company.

SSC has become aware that the individuals related to this company are merely politically connected, and, as such, it is presumable that they do not necessarily have the operational and technical gold mining expertise required to re-open and operate the Mines and ensure that they are successfully placed back into production.

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This is completely contradictory to the narrative followed by them over the last few months, including in their court papers.

In addition, it is important to note the status, financial capacity and technical and operational capabilities of our partner company in our transaction, which has been widely publicized.

SSC's litigious process remains ongoing and has been delayed by various interlocutory applications brought. Presiding over the matter, Acting Judge Roelofse made a finding that the resolution be declared null and void and, consequently, that Flaming Silver’s main application to compel VGSA to transfer the shares be dismissed, meaning that the merits of SSC's main application have not been considered.

Lastly, Arendse comments:

“We have already invested a significant amount of cash into these businesses and have spent a substantial amount of time creating meaningful relationships with the three affected families, the communities and the ex-workers of Barbrook and Lily Mines.

"We will not allow the VGO and VGSA directors and management to destroy our investment and commitment to re-opening the mines and will most definitely not allow the prolonged suffering of the families, communities and ex-workers to be extended any longer.”