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Cons Murch antimony and gold mine could face liquidation after Chinese firm Heaven-Sent offered to buy its main shareholder Village Main Reef in a deal which excludes the troubled operation.
The Chinese asset manager has made an exclusive firm offer to buy the South Africa-based Village Main Reef, which owns a 76.6% stake in Cons Murch, for R12.25 ($1.07) a share.
But Cons Murch, which began voluntary business rescue proceedings in December last year when Stibium Mining failed to raise sufficient funding to buy the mine, is not included within the offer.
“At the time of Heaven-Sent’s first approach to Village, Cons Murch was in the process of being sold to Stibium. Accordingly, Heaven-Sent never anticipated acquiring Cons Murch as part of the Village group of companies,” Village said.
Village had committed approximately R22 million to finance the mine until it was sold or taken out of business rescue, but no agreement has been concluded.
“Accordingly, there is the possibility that the business rescue practitioner of Cons Murch could apply to court to place Cons Murch into provisional liquidation as soon as the [financing] is depleted,” Village said.
The decision would be taken by the business rescue practitioner in consultation with the Village board.
This uncertainty over the future of the mine comes as Cons Murch struggles to boost its output, which first fell as a result of strike in June 2014, and more recently has been hampered by breakdowns and safety-related stoppages.
This led to lost production of 129 tonnes of antimony and 11kg of gold for the quarter ended June 30, and an operating loss of R54 million in the previous quarter.
Chloe Smith chloe.smith@metalbulletin.com Twitter: ChloeSmith_MB