Wednesday, 20 July 2016

AfroCan: Statement on Vantage transaction

AfroCan: Statement on Vantage transactionAfroCan Resources Gold Ltd (AfroCan) (www.AfroCanResourcesGold.com) has responded to recent media reports regarding its involvement in the Vantage Goldfields Ltd (Vantage) transaction with a single statement "AfroCan denies much of the positioning .... and notes that certain statements are mere spurious allegations.  AfroCan has issued a formal communication to Vantage Goldfields Limited the Australian holding company of Lily Mine setting out its position."
 

Through its attorneys in Sydney, AfroCan has now issued a letter to Vantage setting out the reasons why AfroCan believes Vantage has no grounds on which to bring action or any claim whatsoever against AfroCan and that AfroCan would vigorously resist any such claim if it were brought.

AfroCan is also compelled to place in the public domain certain facts in its possession which will provide the public, affected parties and AfroCan's current and future stakeholders with a more balanced representation of the reasons for AfroCan's withdrawal from the transaction:


1.The South African Minister of Minerals and Energy announced the award of ex gratia payments of R200,000 per family of each deceased worker and R50,000 per worker who was underground at the time of the crown pillar collapse on 5 February 2016. The Business Rescue Plan contains a disclaimer in this regard. “During the investigations into the affairs of the Company [Vantage] it is apparent that no one director, management nor a collective of directors has the mandate or the limit of authority to make such a decision nor was it taken by them. The Company therefore denies these commitments.” But then goes on to say “Together with the Practitioner [Lily Mine] will honour the Ex Gracia payments as stated. The money will be paid by 30 July 2016.”  As the Business Rescue Plan was published on 16 May 2016 and voted on by affected parties on 25 May 2016, i.e. before AfroCan signed the Subscription Agreement on 26 May 2016 it is still unclear just who will fund this award of R4,350,000, particularly in light of Vantage’s admission that there is no funding available from the IDC;


2.Vantage CEO McChesney has admitted that it was at the Minister's behest that chose not to retrench the Lily Mine workers, which has now caused the significant problems with arrear salaries;


3.On 6 June 2016 the Minister was quoted in the South African media ruling that Lily Mine would remain closed until the container was recovered. This is practically a Force Majeure event as definitive as the crown pillar collapse itself and makes Vantage un-investible. Without the certainty of Lily Mine recommencing commercial operations just who will provide the R160million required to attempt the recovery of the container is unclear; Read more....

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