Shareholders of Village Main Reef are advised that the business rescue practitioner of Cons Murch applied to Court in terms of section 141(2)(a)(i) of the Companies Act, 2008 (Act 71 of 2008) as amended (“the Companies Act”), to discontinue the business rescue proceedings of Cons Murch and place Cons Murch in provisional liquidation.
The effective date of the provisional liquidation is 5 February 2015.
The board of directors of Cons Murch, an antimony and gold mine at Gravelotte in Limpopo, placed the company under business rescue in terms of Section 129 of the Companies Act on 15 December 2014 after a transaction to sell the company lapsed.
Village Main Reef had been involved in negotiations to sell the shares in Cons Murch to Australian junior Stibium Mining. Stibium agreed in May to buy Cons Murch for US$15m in addition to which it would provide a loan of up to $10m to recapitalize the operation.
Stibium also agreed to fund the first $2m of any shortfall in the company’s rehabilitation liabilities.
However, the negotiated transaction to sell the shares lapsed in December 2014 when Stibium was unable to obtain funding.
As communicated at the time to creditors, employees and trade unions, the business rescue practitioner endeavoured to secure post commencement funding and a buyer for the mine.
After seven weeks of business rescue proceedings, the business rescue practitioner determined that there was no reasonable prospect for the company to be rescued by way of said proceedings.
The decision was taken to move to provisional liquidation. An order was applied for to the High Court of South Africa for business rescue proceedings to be discontinued and for the placing of the company into provisional liquidation.
Clifford Maredi has been appointed by the Master of the High Court as a provisional liquidator.
Further liquidators will be appointed by the Master of the High Court. Once liquidators have been appointed, they will liaise with all creditors and employees and act in terms of the provisions of all applicable legislation.
Placing Cons Murch in provisional liquidation will allow the retention of the mining rights owned by the company. It will also allow the liquidators an opportunity to ensure the safety of the essential services employees and the security of company assets.
