Gwanda based gold mine goes on the offensive and guard against choreographed ‘business rescue’

Gwanda-Forbes & Thompson (Bulawayo) (Private) Limited, owner of Vubachikwe Mine in Gwanda, has responded to an application filed by Fawcett Security Operations on 25 April 2024 to put their mine under corporate rescue.

The application comes just as the board and shareholders are finalising a technically and commercially sound plan with VBKOM, their independent mining consultants, to restart the mine. As earlier reported the mine was placed on care and maintenance after an illegal strike resulted in extensive damage in November 2022.

Vubachikwe’s opposing affidavit is explosive and fingers a number of United Kingdom and Bulawayo based parties alleging a conspiracy to orchestrate a hostile takeover of the Vubachikwe mine by an abuse of the corporate rescue process.

It is alleged in one of the affidavits that the conspiracy ringleader is Benjamin “Ben” Turney, a UK businessman and the CEO of Kavango Resources PLC, a London listed “junior” mining company which is controlled by the Kansagras, a wealthy family of Indian descent with roots in Kenya.

It is alleged that in furtherance of this plan Turney is working in concert with Marida van der Spuy and Rob Forfar, two former Duration senior managers, for several specific purposes all aimed at pressuring Vuba’s Managing Director, Allan Dolan to sell Vubachikwe to Kavango for minimal consideration.

It is further stated that during the course of 2023 the pair deceitfully attempted to turn Vubachikwe staff against Dolan, undermine its financial position, steal and provide confidential information to Turney as well as fabricate significant debts alleged to be owed by Vubachikwe to several colluding creditors including Motor Maintenance Systems (run by one Marc Mitchell) and Carbon Processors (run by Julian Nicholas).

The affidavit suggests that Andy Laing, the MD of Fawcetts, is being used as a front for the Application and is using the application to settle scores with current Vuba shareholders following a fall out between Dolan and the Thompson Family who are alleged to be associated with Laing and are former owners of the asset.

The company alleges that Fawcett’s, and its co-conspirators abuse of the corporate rescue process is made plain by two incidents. The sole basis of the Fawcetts’ Application was a debt of $170,000 owed by Vubachikwe for security services. There had been meaningful negotiations with Fawcetts and a settlement in principle had been reached, including the provision of valuable security that fully covered the debt. However, for reasons unknown, Laing withdrew at the last minute and the corporate rescue application followed immediately thereafter. More telling is the tendering of full payment of the debt ($181,067 which includes interest and legal costs) by Vubachikwe shortly after the Application was received.

Inexplicably, the payment was refused. That should have been the end of the matter. Fawcett should not have any other interest in Vubachikwe other than receiving their money which they have refused.

According to the opposing affidavit, the Fawcett Application makes a number of incorrect and uninformed allegations about the financial condition of Vubachikwe which are squarely refuted in its Opposing Affidavit. Most of these are based on the rogue forensic report authored by former Forbes & Thompson senior manager Rob Forfar once again displaying his deceit, duplicity and misleading work.

It has been alleged that Vubachikwe was “heading towards insolvency” and “owes various creditors, including workers, the Zimbabwe Revenue Authority and Zesa Holdings more than US$10 million.”

From the opposing papers, it seems Vubachikwe is in no sense insolvent. As of 10 May 2024, on a book value basis, its assets exceed its liabilities by US $21,648,600 and by $32,105,844 when a conservative indicative valuation of the mine’s resources, prepared by VBKOM, is used.

Further, and as of 10 May 2024, Vubachikwe has current assets of US $300,000 (excluding a ZIMRA refund due of $1,840,968) and current liabilities of $161,065. Vubachikwe has paid creditors $1,572,587 over the past 12 months and has declared sums not to be due, disputed or under verification of $1,479,472.

As but one example of misinformation spread by Fawcetts and Rob Forfar’s so called “forensic report” the Application alleges ZIMRA is owed $2,671,658 when in fact ZIMRA owes Vubachikwe $1,840,968 (as verified by ZIMRA’s TARMs system). A wildly inaccurate swing of $4,512,626.

Finally, it should be noted that through shareholder investment loans Vubachikwe owes its beneficial shareholder, Duration $12,925,039 representing over 90% of the debt owed by Vubachikwe to any and all third parties.”

Additional reporting by Sunday Mail