VUBACHIKWE Gold Mine’s prospects of reopening looks bleak as a forensic investigation revealed several issues that could hurt its future operations such as mismanagement and mounting debts.
According to the report conducted by South African forensic company, Forfar Forensics, the situation at the mine paints a gloomy picture for workers who hoped for a return to good times.
Located near Gwanda, a town in Matabeleland South province, Vubachikwe Gold Mine closed on November 8, 2022, after workers downed tools over outstanding salaries and poor working conditions, among other issues.
The report indicates that Duration Gold Zimbabwe, owners of Vubachikwe Gold Mine through its subsidiary Forbes and Thompson (Pvt) Ltd, faced a ballooning debt of over US$8 592 720 and ZWL$3 556 917 841 as of November 2023.
Monthly debt increase is estimated at approximately US$250 000 with no strategy to service it.
The forensic investigation was conducted between January 2022 and November 2023 to look at the overall management of Forbes and Thomson (Pvt) Ltd and its associated group companies locally.
Most of the problems highlighted are tied to the major shareholder’s incompetence, over-expenditure and mismanagement of funds.
Allan Dolan, the major shareholder and managing director of Forbes and Thompson, is alleged to have an appetite for spending and travelling without taking care of the bills.
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This has led to hotels only accepting Dolan after a deposit has been paid, the report read.
Bronte Hotel in Harare and Musketeers in Bulawayo are cited as some of the hotels demanding deposits.
Besides travelling, Dolan is accused of “reckless trading” — engaging new creditor liabilities despite the company’s inability to pay new appointees, undervaluing asset sale transactions to benefit related parties at the expense of creditors, and breaking creditor promises.
This has resulted in Forbes and Thompson losing credibility with its suppliers.
These are some of the reasons Vubachikwe employees went on strike on April 8, 2022.
The challenges at the mine have left over 800 employees reeling in poverty.
“The Forfar Forensic report notes that during the period January 2023 to November 2023 workers at Vumbachikwe were receiving a stipend of US$100 and food hampers worth approximately US$70, which were only given to the 107 essential services employees,” read part of the report.
“Despite coming up with such a fuzzy selection criterion, the company failed to own up to the stipend.”
