FTI to probe Wiluna raising

Administrators for Wiluna Mining Corporation will investigate details of a last-ditch capital raising that collected less than the company reported to the ASX in the weeks before its collapse.

The first meeting of creditors for the struggling goldminer was held earlier this month by FTI Consulting managing directors Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian Francis, who affirmed in an update this morning that their intention was to keep Wiluna’s gold operations running.

It comes just over two weeks after administrators were appointed to Wiluna, which had been struggling with cost pressures, staff availability and issues ramping up its primary gold operation in WA’s Mid West.

With pressure growing on the company’s gold output and working capital, FTI says the business evaluated funding options before and after laying plans to raise $84.5 million via an entitlement offer in May.

Wiluna had shares on offer at a 42.4 per cent discount on its 10-day volume weighted average price at the time of 40 cents, chasing a minimum $50 million with Perth firm Lazarus Corporate Finance as its broker.

Part of that raising also included an agreement from Wiluna’s underground contractor Byrnecut, which Wiluna claimed at the time would convert $13.4 million of expected payments into any shortfall on the offer.

In the weeks following, Wiluna told the market it had received subscriptions and commitments under the raising to the tune of $63.4 million.

Though FTI claims Wiluna had only raised $57.4 million, according to its report today, and had approximately $7 million yet to be collected.

It means Wiluna had only raised and received $50.3 million in cash and debt to equity conversion, by FTI’s estimates.

“An independent investigation will be completed by the Administrators into the affairs of Wiluna,” FTI’s statement read.

“This will include, but not limited to, the May 2022 capital raise, the details of the prospectus released in relation to the May 2022 capital raise, and the eventual use of funds received.”

"Administrators expect the process to take between three and six months due to the “complexity of the matter.”

Wiluna shares were suspended from trading on July 21.