DT Correspondent
Vumbachikwe Gold Mine’s prospects for reopening have been condemned following a damning forensic report conducted by South Africa’s Forfar Forensics.
The report, which highlights mismanagement, mounting debts, and unscrupulous operations, has cast a figurative black cloud over the heads of the hopeful workforce eagerly awaiting the mine’s revival.
Vumbachikwe Gold Mine, located in Gwanda, was forced to close its operations on November 8, 2022, after workers downed tools due to issues such as outstanding salary payments and poor working conditions.
The report exposes the dire financial situation faced by Duration Gold, the owners of Vumbachikwe Gold Mine, and its subsidiary Forbes and Thompson (Pvt) Ltd. As of November 2023, the companies were burdened with a staggering debt of over US$8,592,720 and ZWL 3,556,917,841.
The debt was increasing by an estimated US$250,000.00 per month, with no clear plan or strategy in place to address the liabilities.
The forensic investigation, conducted between January 2022 and November 2023, aimed to assess the overall management of Forbes and Thompson (Pvt) Ltd and its associated group companies in Zimbabwe. The findings revealed numerous irregularities that present a bleak outlook for the company’s recovery.
Much of the problems appear to stem from the incompetence, overspending, and mismanagement of funds by major shareholder and Managing Director, Mr Allan Brent Dolan.
The report highlights Mr Dolan’s excessive travel expenses and the accumulation of unpaid hotel bills, with some hotels requiring advance deposits before accepting him as a guest. Hotels such as Bronte Hotel in Harare and Musketeers in Bulawayo are mentioned in the report.
Additionally, Mr Dolan is accused of engaging in reckless trading, including incurring new creditor liabilities despite the company’s inability to pay them, undervaluing asset sale transactions to benefit related parties at the expense of creditors, and failing to fulfil promises made to creditors.
These actions have severely damaged Forbes and Thompson’s credibility with its suppliers.
The strike that led to Vumbachikwe employees downing tools in April 2022 was driven by the workers’ frustration over unpaid wages, not their greed.
The over 800 employees have been living in poverty, despite working in an industry that is considered one of the country’s largest foreign currency earners.
This situation is at odds with President Mnangagwa’s vision of leaving no one behind.
According to the Forfar Forensic report, between January 2023 and November 2023, workers at Vumbachikwe received a monthly stipend of US$100.00 and food hampers worth approximately US$70.00. However, these benefits were only provided to 107 essential services employees, and the company failed to meet its obligations even under this limited arrangement.
Mr. Dolan, as the major shareholder, is accused of diverting funds from other subsidiaries, such as Met Solutions, to finance his cash-demanding Exclusive Prospecting Order (EPOs) soil sampling project, which has no relevance to Forbes and Thompson/Duration Group operations.
This diversion of funds has resulted in Met Solutions struggling to pay employee salaries and wages. The report also reveals that Duration Gold failed to allocate funds to address the dire situation faced by Vumbachikwe employees, instead using the money for purchasing camping equipment and paying samplers engaged in the EPOs project.
In addition to unpaid employee salaries, Forbes and Thompson owe substantial amounts to other creditors, including the Zimbabwe Revenue Authority (ZIMRA), the Zimbabwe Electricity Supply Authority (ZESA), and ZINWA. ZESA, for example, is owed US$1,116,000.00, with the debt accumulating at a rate of approximately US$60,000.00 per month. The report also highlights Forbes and Thompson’s non-compliance with ZIMRA, including issues of tax evasion and inaccurate payment of taxes.
Given these findings, questions arise about whether the idea of reopening the Vumbachikwe mine is a mere facade aimed at pacifying creditors. Mr. Dolan is burdened with unpaid hotel bills, outstanding employee salaries dating back to 2022, and a long list of service providers awaiting payment.
Despite these outstanding responsibilities, Mr. Dolan continues to prioritize personal soil sampling projects that do not benefit the overall company.
Vumbachikwe Gold Mine was once a significant mining operation in Matabeleland South, and its reopening would have provided job opportunities for the community, contributed to the province’s gold output, and boosted the national gross domestic product.
However, the current circumstances suggest that these hopes may remain unfulfilled, leaving the future of the mine in doubt.
