This follows after Cons Murch failed to secure funding for its mining activities. Cons Murch’s main cash flows stems from the disposal of antimony and gold produced at its mine in Limpopo.
[DATA VIL:Village Main Reef LTD.], currently holds a 76.6 per cent stake in Cons Murch, said it has previously funded the mining activities of Cons Murch but is no longer in a position to do so.
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Negotiations that had taken place over the past 12 months with Australian company Stibium Mining to acquire Cons Murch have also fallen flat.
“The negotiated transaction to sell the shares in Cons Murch failed on Wednesday, 10 December 2014 in that Stibium, the purchaser was unable to obtain funding to implement the acquisition of the shares of the company,” said Village in a statement.
“After it became clear that the aforementioned transaction would not be consummated Village resolved that it was unable to continue funding Cons Murch, therefore resulting in Cons Murch becoming distressed. The board of directors of Cons Murch resolved to place Cons Murch under business rescue in terms of Section 129 of the Companies Act.”
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After evaluations however the board of directors said that despite the mine being financially distressed, it is worth rescuing at Cons Murch’s assets exceeds its liabilities.
The Department of Mineral Resources has therefore been consulted on the granting of various approvals which could assist Cons Murch in its rescue plan.