Gye Nyame awaits ministerial approval to dispose of diamond parcel


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The judicial manager of the now defunct diamond mine, Gye Nyame Resources says he is awaiting approval from the mines ministry to enable him to auction the company’s diamonds later this month and pay off mounting administration costs.

Gye Nyame Resources, a joint venture between the state-owned Zimbabwe Mining Development Corporation (ZMDC) and Bill Minerals, represented by Ghanaian businessman William Ato Essien, had its licence revoked last year due to insolvency and failure to adhere to environmental requirements.

The company, which was granted mining concessions in Marange in 2011, was placed under provisional liquidation on March 26 last year at the behest of some creditors and final judicial management on June 25 of the same year.

Since it had not yet been granted with a  licence, its only diamond parcel, estimated to be around 2 000 carats has been sitting at  ZMDC since mid last year.

Judicial manager Winsley Militala of Petwin Executor and Trust said yesterday that he received a letter from ZMDC last week informing him that he needed to seek authority from the  mines ministry to dispose of the parcel at the next international auction later this month.

“They (ZMDC) are prepared to help us sell it  but authority must first be granted by the permanent secretary in ministry of  mines. We have already written to the ministry and we are now waiting for the response,” he said.

ZMDC acting general manager, Wilson Chinzou said last week that valuations were being done on the parcel.

Militala said the money would go towards administration costs that have been mounting while the company awaits investment.

“I have hordes of administration costs to settle and I need to sell that parcel as soon as possible. We are now waiting for the letter from the ministry,” he said, adding that ZMDC had warned him that there were preparations that needed to be done before the sale, hence the need to secure authority ahead of time.

The insolvent mine, whose assets are estimated to be worth $6.6 million, owes creditors $13.5 million of which $5 million is owed to Ecobank through a loan borrowed by one of the shareholders, Bill Minerals at the inception of the project.

Earlier this month, creditors voted in favour of a $20 million capital injection by Damo Resources pending regulatory and other approvals.

As part of the arrangement, creditors agreed to defer payment of liabilities by 12 to 36 months pending recapitalisation and resumption of operations at the mine.

Creditors further agreed to convert debts to preference shares where a special purpose vehicle would be created to carry out mining exploratory work and related mine development.

Gye Nyame came under the spotlight last year when President Robert Mugabe accused former ZMDC chairman, Godwills Masimirembwa, of soliciting a bribe worth $6 million from the company’s Ghanaian investors.

It is alleged that the Ghanaian investor injected only $8 million out of an agreed $110 million into the business, with further claims that no due diligence was carried out to ascertain his company’s financial capabilities.- The Source

(327 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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