Gold miner Croesus Mining NL has shocked the market by announcing that it has gone into administration, despite the appointment of a new board led by Michael Kiernan and substantial progress with restructuring its business.
The company said its operations had been turned around from substantial losses to cash surpluses and it had also executed an agreement with Macquarie Bank to reschedule its hedging position.
However Croesus said it was unable to reach agreement with a second hedging counterparty, understood to be Mitsui Metals, which was owed in excess of $12 million.
Therefore the board has appointed Bryan Hughes and Vincent Smith of Pitcher Partners as joint and several administrators.
The administrators said they were confident the company would continue in accordance with its recovery plan, and therefore gold mining operations at Norseman would continue in the ordinary course.
Former Consolidated Minerals managing director Michael Kiernan succeeded Croesus founder Ron Manners as chairman late last year.
The company's recovery plan also included the April appointment of experienced metallurgist Allan Quadrio as managing director.
Croesus shares have been suspended from trading since the company posted a $27.4 million loss for the first half of 2005-06, including big hedging losses.
A copy of the statement is available from the Croesus company information page on the ASX website.
