Vubachikwe Gold Mine prospects of resuscitation diminish

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By Staff Reporter

HOPES of Vubachikwe Gold Mine’s reopening are fading as a forensic investigation report flagged several issues ranging from mismanagement, mounting debts, and operating in bad faith.

The damning report, which was conducted by ForFar Forensics, a South African company, may be the figurative black cloud hovering over the heads of the workforce that still hoped to be breadwinners again.

Vubachikwe Gold Mine in Gwanda closed on November 8, 2022, after workers downed tools due to outstanding salary payments, poor working conditions and other issues.

According to the report Duration Gold, who are the owners of Vubachikwe Gold Mine, and its subsidiary Forbes and Thompson (Pvt) Ltd, are swimming in murky waters due to a ballooning debt of over US$8 592720 and ZWL 3 556 917 841 as of November 2023.

A monthly debt increase is estimated at approximately US$250 000 and there is no laid out plan to service the debts.

The forensic investigation report was conducted between the period of January 2022 to November 2023. The aim was to look into the overall management of Forbes and Thompson (Pvt) Ltd and its associated group companies in Zimbabwe.

The results show some irregularities that do not portray a positive position for the company to get back on its feet. Much of the problems emanate from the major shareholder’s incompetence, over-expenditure and mismanagement of funds.

A Mr. Dolan is the major shareholder and Managing Director of Forbes and Thompson, whose globetrotting has gobbled a huge chunk of money.

The investigation report notes that hotel bills are accumulating with some hotels now only accepting him as a guest only on condition a deposit is paid in advance. Bronte Hotel in Harare and Musketeers in Bulawayo are cited as some of the hotels that have put this condition.

Apart from the extensive travelling, he is said to have been involved in “reckless trading” that included engaging new creditor liabilities despite the company’s inability to pay the new appointees, undervaluing asset sale transactions to benefit related parties at the expense of creditors, and failing to own up to promises made to creditors.

This has resulted in Forbes and Thompson losing credibility with its suppliers.

Vubachikwe has in recent years grabbed news headlines with its employees going on strike on April 8, 2022, due to non-payment of salaries.

The over 800 employees have reportedly been reeling in poverty and yet working in an industry regarded as one of the country’s biggest foreign currency earners.

The Forfar Forensic report notes that from January 2023 to November 2023 workers at Vumbachikwe were receiving a US$100 stipend and food hampers worth approximately US$ 70, which were only given to the 107 essential services employees.

Despite coming up with such a fuzzy selection criterion, the company failed to own up to the stipend.

Dolan as the major shareholder, is being accused of embarking on a cash-demanding Exclusive Prospecting Order (EPOs) soil sampling project, which has no bearing to the operations of Forbes and Thompson/Duration Group operations.

He is said to own more than 30 EPOs, blocking other potentially productive miners from getting mining claims.

An EPO is a large area of ground targeting selected minerals for exploration. In Zimbabwe EPOs tenure are three years with an option of renewing for another three years.

Curiously Dolan is said to have an undisclosed number of EPOs none of which were paid for.

The investigation claims that of all these EPOs, the soil sampling project is being funded by diverting cash generated by other subsidiaries such as Met Solutions. As a result, even Met Solutions has been struggling to pay their employee salaries and wage bills.

According to the Forensic report, Duration Gold has failed to allocate funding to the Vubachikwe human disaster, but instead funded the purchasing of camping equipment and paying samplers engaged in the EPOs project.

Apart from the employee salaries, other creditors in the queue include the Zimbabwe Revenue Authority (ZIMRA), Zimbabwe Electricity Supply Authority (ZESA), and ZINWA. By November 2023, ZESA was owed US$1 116 000, and the money was accumulating at approximately US$60 000 per month.

The Forensic report indicates that an audit was done into Forbes and Thompson ZIMRA non-compliance and issues of tax evasion that include, non-payment and/or inaccurate payment of Pay As You Earn (PAYE) and non-remittance of withholding tax.

ZIMRA issued an assessment to the value of US$2 671 6658 withholding tax accrued but not remitted.  Such action is not only to the detriment of employees and staff of Forbes and Thompson but also to the national fiscus.

In simple terms, Forbes and Thompson (Pvt) Ltd has not been conforming to the legislative requirements expected in the country. With all these findings, one would wonder if the idea of reopening Vubachikwe mine is not just a dummy sold to quiet the creditors.

Vubachikwe is a fading mining giant in Matabeleland South and its return to productivity would create thousands of job opportunities, and contribute to the province’s gold output and national gross domestic product (GDP).