The receivers who took charge of the Windimurra vanadium project in February have put the trouble-plagued mine up for sale, with Gresham Advisory Partners appointed to find a buyer.
The receivers who took charge of the Windimurra vanadium project in February have put the trouble-plagued mine up for sale, with Gresham Advisory Partners appointed to find a buyer.
Gresham is currently seeking out potential interested parties, while it prepares an information memorandum and financial model for the project.
It plans to open a data room and run site visits for bidders who lodge a non-binding indicative offer.
Gresham is aiming to get final binding offers in July.
A project snapshot issued by Gresham promotes the project as having one of the world’s largest known vanadium reserves.
It states that more than $250 million of infrastructure is in place, including the vanadium refinery, accommodation camp, roads, gas pipeline and power station.
The snapshot describes the project as a fast-track opportunity capable of resuming production within 12 months.
Before that can occur, a new owner would need to complete a rebuild of the crushing, milling and beneficiation circuit, which the company has previously estimated would cost about $130 million.
The rebuild of the CMB circuit is needed to make the project economically sustainable and is separate from the rebuild of the beneficiation plant, which was badly damaged by fire in February 2014.
Engineering contractor Primero Group was due to complete the $30 million rebuild of the beneficiation plant earlier this year, but this work was halted when the company went into administration.
Matthew Caddy, Keith Crawford and Norman Oehme of McGrathNicol were appointed receivers and managers of project owner Midwest Vanadium Pty Ltd (MVPL) on February 12.
That was one day after MVPL’s directors appointed Darren Weaver, Martin Jones and Ben Johnson of Ferrier Hodgson as administrators.
MVPL’s parent company, ASX-listed Atlantic, is working with the receivers and Gresham on the sale process.
The receivership came after a breakdown in negotiations between MVPL’s noteholders and Atlantic’s major shareholder, Droxford International, over a restructuring and additional funding.
The Windimurra project was originally developed by Perth company Precious Metals Australia in the late 1990s.
It operated successfully in the early 2000s before low vanadium prices led to it being shut down by global miner Xstrata (now Glencore), which controversially dismantled the plant.
In 2010, Atlantic acquired MVPL, which subsequently issued $US335 million of secured notes to fund the rebuild of the plant.
Atlantic’s financial position has been helped by $87 million of insurance payments from the fire.
At the end of January, when Atlantic last updated the market, it had $13.5 million in cash, and believed that further material amounts were due and payable under the insurance policy.
