Lerala Mine assets to be sold to fund liquidation

Isaac Pinielo | Friday November 17, 2017 17:40

The diamond miner, which was put under provisional liquidation by the High Court in June this year, currently has a balance of P748,000 in its bank account, and the total value of all assets on site are estimated at P251 million.

The liquidator, Kopanang Thekiso stated in a recent report to creditors that on the date of liquidation, there was only P43,000 balance in the mine’s bank account. In addition to that, he said the Botswana Unified Revenue Service (BURS) then paid a VAT refund of P2.2 million, which he said they have been using to keep the mine secure and insured.

However, Thekiso is worried that the funds available will soon run out. As such, he said he has requested the Master of the High Court to auction out some of the assets, which are not  consequential  to the integrity of the mine.

One of the major items which would have raised a significant amount was a spreader which was bought and never installed,  he said.

Thekiso explained that the spreader was worthless to sell because its mechanism was specific to Lerala Mine.

To date, the liquidator said he has only sold 19 bags of Fesi for P150,000. He said the 3,800 carats of diamonds that are under the custody of Brinks Global Services at the Diamond Park in Gaborone would require permission from creditors to be disposed. As if that is not enough, Thekiso said the collapsed mine has continued to incur expenses that are eating onto the bank’s meagre balance.

He noted that for the first two months after liquidation, the mine was spending in excess of P75,000 per month as a result of the mine’s electricity supply that came from large 400+Kva diesel generators which were synchronised to be able to fully power the plant at full capacity.

Given that there was just a basic care programme going on to secure the mine, the liquidator said they did not need the generating capacity of even one of the generators.

We were wasting funds on diesel, so a decision was made to buy a smaller 16Kva generator for P55,000 to just power the lights and minor office requirements and so far the savings have been significant,  Thekiso said.

He stated that they are now looking to reduce the size of the 200Kva generator, which is used at the employees  camp.

He said a 60Kva generator belonging to the mine has been taken for repair, noting that once repaired it would replace the camp generator. Other major expense items that Thekiso mentioned are wages and food provisions for the 15 security personnel, an electrician and two cooks who have been on site for the past three months and kept the integrity of the plant and the camp intact since the rest of the staff have been dismissed.

Also, the liquidator said they have appointed an officer who visits the mine once a month to do inspections.

Another major expense, he said, is insurance, which for the year was quoted at P1.2 million. We will be paying just over P270,000 per quarter,  said Thekiso.