Golden Sibanda Senior Business Reporter
The High Court has placed troubled gold producer Metallon Zimbabwe’s Mazowe and Shamva mines under administration after granting an application by Associated Mine Workers Union of Zimbabwe (AMWUZ) for a reconstruction order of the two mines.
Reggie Saruchena of Grant Thornton was immediately appointed the interim corporate rescue administrator of the two mines while Cecil Madondo of Tudor Consultants was also appointed to deputise him for purposes of rescuing the two mines.
“The first and second respondent are hereby placed under supervision and corporate rescue proceedings in terms of section 124 (1) (a) of the Insolvency Act and shall be subject to supervision, management and control as provided for in the said Act.
“The corporate rescue practitioners shall carry out their duties in accordance with the relevant provisions of the Insolvency Act and shall be entitled to be remunerated in terms of section 136 of the Act,” reads a ruling on Tuesday by High Court Judge Justice Tawanda Chitapi.
Formerly owned by South African business tycoon and ex-chairman of the company, Mzi Khumalo, Metallon was once Zimbabwe’s largest gold mining company operating five gold mines throughout the country, namely How, Mazowe, Shamva and Redwing mines. Across the group, Metallon had a significant resource base with a joint ore resources compliant (JORC) resource base of 8,3 million ounces, and was targeting an additional 4-6 million ounces through exploration before its fall from grace.
The mothballed gold producer halted output at three of its four mines last year because of mounting debts estimated at US$200 million, reports also indicated the owner then was considering selling, which he eventually did. Metallon then suspended operations after a group of workers applied to have business-rescue measures implemented at the two mines, the company confirmed last year. It had a plan for 29 000 ounces by 2019 before its collapse.
The gold producer was then sold to a local consortium, Landela Mining Venture, owned by an obscure entity called Sotic International. Sotic is believed to be owned by business mogul Kudakwashe Tagwireyi, who has expansive interests in fuel procurement, distribution and retail and owns chrome, nickel and other gold assets in the country.
The Mauritius-based firm, also bought a 74,73 percent stake in London Alternative Investment Market (AIM) listed Asa Resource Plc, according Asa subsidiary and Zimbabwe Stock Exchange listed Bindura Nickel Corporation (BNC), Muchadeyi Masunda. Sotic’s Landela also bought into one of Zimbabwe’s largest platinum projects, Great Dyke Investments.