Canadian gold producer invests $11m in embattled Vantage Goldfields

JOHANNESBURG (miningweekly.com) – Canadian gold producer AfroCan Resources Gold will invest $11-million over the next two months into South African gold miner Vantage Goldfields, effective June 1, following an agreement signed Friday, Vantage confirmed to Mining Weekly Online.

The companies noted in a joint statement that AfroCan, which was in the process of building a portfolio of gold assets, had identified Vantage as a strategic component in its plans.

The statement said that Vantage had an “excellent production history” and that it had grown five-fold in the past five years.

Vantage, which owned and operated the Barbrook and Lily mines, in Barberton, Mpumalanga, last month entered into business rescue after ceasing operations at Lily mine in early February owing to a ground collapse, which left three miners trapped underground.

The company described this event as a force majeure, adding that a portion of the AfroCan investment would be allocated to the reopening of the Lily mine, while the balance would be used to expand production at the Barbrook operation.

Vantage said the Lily mine could now start securing additional post-commencement funding to ensure that it went back into production as soon as possible. The reopening of the mine was expected to take place in the next six to eight months.

Vantage expected to ramp up its production to 50 000 oz/y in the next two years, compared with a production rate of  32 418 oz achieved in 2015.

Meanwhile, trade union Solidarity general secretary Gideon du Plessis welcomed the foreign investment made in the mining company, expressing hope that the investment would lead to the immediate payment of all outstanding wages due to Lily mineworkers.

The union also hoped that this agreement would see all retrenched mineworkers receive their severance packages immediately.

“We [also] hope that, as provided for in the business plan, the bodies of the three missing miners can be retrieved within the next six to eight months,” said Du Plessis, who congratulated Vantage Goldfields management and the business rescue practitioner on the significant steps taken to get the Lily mine back into production.

“We are also appealing to the Industrial Development Corporation to grant further funding to enable the Lily mine to be fully operational soon, for the good of the workers and South Africa as a whole,” he concluded.