Gwanda-based mine fights push for business rescue

Source: Gwanda-based mine fights push for business rescue | The Sunday News

Gwanda-based mine fights push for business rescue
Vubachikwe Mine

FORBES & THOMPSON Private Limited, the owner of Vubachikwe Mine in Gwanda, Matabeleland South Province, is opposing an application filed by one of its creditors, Fawcett Security Operations, on 25 April this year to put the gold mine under corporate rescue.

The application comes as the board and shareholders of the mining company are finalising a plan with VBKOM — their independent mining consultants — to restart operations.

As earlier reported, the mine was placed under care and maintenance after an illegal strike resulted in extensive damage in November 2022.

In its opposing affidavit, Forbes & Thompson claims there is an ongoing conspiracy by some United Kingdom and Bulawayo-based parties to orchestrate a hostile takeover of the mine through the corporate rescue route.

It alleges that the ringleader behind this plot is Benjamin “Ben” Turney, a UK businessman and CEO of Kavango Resources Plc, a London-listed junior mining company, which is controlled by the Kansagras, a wealthy family of Indian descent with roots in Kenya.

Turney is reportedly working in concert with Marida van der Spuy and Rob Forfar — two former Duration senior managers — to pressure Vubachikwe’s managing director Allan Dolan to sell the mine to Kavango for a song.

It is further alleged that during the course of 2023, the pair attempted to turn Vubachikwe staff against Dolan, undermine its financial position, steal and provide confidential information to Turney, as well as fabricate significant debts claimed to be owed to several creditors, such as Motor Maintenance Systems (run by one Marc Mitchell) and Carbon Processors (run by Julian Nicholas).

In the affidavit, Forbes & Thompson also claim that Andy Laing, the managing director of Fawcetts, is being used as a front for the application to settle scores with current Vubachikwe shareholders following a fallout between Dolan and the Thompson family, who are reported to be associated with Laing and are former owners of the asset.

The sole basis of the Fawcetts’ application was a debt of US$170 000 owed by Vubachikwe for security services.

The company, however, claims that meaningful negotiations had been made with Fawcetts and a settlement had been reached in principle, including the provision of valuable security that fully covered the debt.

But Laing reportedly withdrew at the last minute and the corporate rescue application followed immediately thereafter.

Forbes & Thompson claims to have tendered full payment of the debt (US$181 067, which includes interest and legal costs) shortly after the application was received.
Fawcetts reportedly declined the payment.

But Forbes & Thompson further indicates that Fawcetts made a number of incorrect and uninformed allegations about the financial condition of the mine.

It alleged that Vubachikwe was “heading towards insolvency” and “owes various creditors, including workers, the Zimbabwe Revenue Authority (Zimra) and Zesa Holdings, more than US$10 million”.

But the mine, however, says that as of May 10, 2024, on a book-value basis, its assets exceed liabilities by US $21,6 million, as well as by $32,1 million when a conservative indicative valuation of the mine’s resources (prepared by VBKOM) is used.

Further, it reports that as of May 10, 2024, its current assets were US$300 000 (excluding a Zimra refund due of $1 840 968), while current liabilities stood at US$161 065.

Vubachikwe also says it paid creditors $1,6 million over the past 12 months and has declared sums not to be due, disputed or under verification of $1,5 million.

Forbes & Thompson further allege that part of the inaccuracies that were spread through the recent application was the claim that the mine owed Zimra US$2 671 658 when in fact, according to the tax management body’s TARMs system, it is Zimra that owes Vubachikwe US$1  840 968.

Through shareholder investment loans, Vubachikwe reportedly owes its beneficial shareholder, Duration, US$12 925 039, representing over 90 percent of the total debt owed by the mine.