Embattled miner Mirabela Nickel has formally acknowledged “significant uncertainty” about whether it will continue as a going concern, after Canadian regulators issued a ‘cease trade’ order.
Mirabela has been hit hard by weak nickel prices, and the news two months ago that one of its major customers planned to halt purchases of its concentrate.
It announced a 60-day standstill and waiver agreement with its major creditors on November 14, giving it time to progress discussions on potential ways of restructuring its $US454 million of debt.
The next day, Standard & Poor’s said it expected Mirabela would “likely run out of cash by early 2014”.
S&P lowered Mirabela’s credit rating to ‘D’, saying it was highly likely the debt restructuring would be in the form of a distressed exchange.
In an update today, Mirabela said the British Columbia Securities Commission had issued a cease trade order after the company failed to file its September quarter accounts.
Mirabela said it was unable to comply because of the uncertainty over its future.
“Despite the execution of the waiver and standstill agreements ... Mirabela has significant uncertainty regarding its future revenue, potential litigation and whether it will continue as a going concern,” the company said.
“As a result, the company defaulted on its interim filing obligations as it is currently not able to, among other things, estimate asset values and prepare financial statements with confidence.”
