Atlantic payout reaches $87m

Perth company Atlantic, which is in the midst of rebuilding its Windimurra vanadium plant after a fire last year, has received a big cash boost this month in the form of further insurance payments and an R&D tax refund.

In its quarterly report, lodged with the ASX today, the company said its insurers paid a further $24 million this month, bring total payments to $87 million.

The insurance covers material damage to its beneficiation plant from the fire and business interruption costs.

Atlantic estimated last year that total payments could be in the order of $100 million.

Its subsidiary, Midwest Vanadium Pty Ltd (MVPL), received a $16 million reimbursement this month from the tax office under the research and development tax incentive program.

This payment is for the financial year to June 2014, and follows a $27.3 million reimbursement in respect of the 2013 financial year.

Atlantic said it was continuing to make good progress on the rebuild of its beneficiation plant but was still working through other financial and operational challenges.

The $30 million rebuild, led by engineering contractor Primero Group, is on track to be completed just more than a year from the date of the fire, which occurred on February 4.

Separately, the company has completed front end engineering and design (FEED) studies on proposed changes to its crushing and milling circuit.

The changes include replacing the secondary and tertiary crushers and high-pressure grinding rolls (HPGR) with a semi-autogenous grinding (SAG) mill.

The company said last year these changes were estimated to cost $130 million.

However, this work remains dependent on Atlantic securing further funding, and that in turn requires negotiation of a solvent restructuring with MVPL’s note holders.

“The forbearance arrangements put in place during the quarter expired on January 16 2015 and the parties are continuing discussions regarding a new forbearance and the proposed restructuring,” Atlantic said in its quarterly report.

The company’ shares remain suspended.