Australian mining company Vantage Goldfields is involved in merger talks with the Toronto Stock Exchange listed Galane Gold in a bid to reopen the Lily Mine in Barberton, Mpumalanga, where three mine workers remain trapped underground in a container.
Business rescue practitioner Rob Devereux yesterday told Business Report that documents for the merger were "just about signed", paving the way for the embattled mine to resume operations and inject the local economy.
The planned merger comes after the promise to take over the mine by Canadian gold mining company AfroCan Resources Gold’s chief executive Brian Barrett fell through amid allegations of fraud last year.
“It has been a long and hard journey for everyone and this merger means there is light at the end of the tunnel,” Devereux said. “What it does is to bring jobs which are urgently needed, there is not a lot of work in the area. This also affected business, suppliers in the area. The reopening of Lily gives our suppliers more revenue and it is very positive.”
Once the merger was concluded, Galane would have 100 days in which to raise R200million through a placement on the Toronto Stock Exchange. The funds were expected to flow in October, adding that R130m of the R200m raised would be allocated for the development of the mine, and the balance would be used to pay creditors and outstanding salaries for employees.
Galane’s asset Galaxy is 30km away from Vantage Gold. The company also operates a mine in Botswana.
