Coolgardie Minerals has appointed Pitcher Partners’ Daniel Bredenkamp and Bryan Hughes voluntary administrators six months after the Neil Warburton-chaired gold hopeful was added to the ASX.
Coolgardie Minerals has appointed Pitcher Partners’ Daniel Bredenkamp and Bryan Hughes voluntary administrators six months after the Neil Warburton-chaired gold hopeful was added to the ASX.
Business News understands Coolgardie owes $18 million, including to convertible note holders.
The company ran into trouble late last year after higher than expected grade variability and mine dilution at its Geko gold mine led to stockpile grades short of expectations.
Shares in Coolgardie were voluntarily suspended three weeks ago, and also reported the ores had been unsuitable for sale under an agreement with Northern Star Resources, the company said.
Earlier this week, Coolgardie reported to markets that convertible noteholders had issued a default notice because the company had been suspended from trading more than five days.
The company said it considered the notice invalid.
Neil Warburton and Bernard Martin, the father of non-executive director Greg Martin, chipped in about $1 million in loans to the company in December, with an interest rate of 16 per cent.
The company said the terms were comparable to an arm’s length transaction.
Contractor SMS Innovative Mining, which was operating at Geko, is also believed to be a creditor of Coolgardie.
In a release to the ASX today, Mr Bredenkamp said he did not anticipate further updates until April.
“The company incurred mining issues at the Geko gold project in Coolgardie, however it believes those issues have now been substantially resolved,” Mr Bredenkamp said.
“The delays and significant additional costs incurred to date were not budgeted and
are unfunded.
“The administration process provides a moratorium to allow the company to explore all options for resolving this.
“Those options include the sale of the Geko gold project and surrounding portfolio of tenements, which will now be put to the market, whilst the company also explores debt restructuring and capital raising alternatives.”
Speaking to Business News, Mr Bredenkamp said administrators would be working to confirm grades and process stockpiled ore, although there would be no active mining.
About $30 million of gold was available, but there would be a cost to get that ready for sale.
He noted the strong gold price as a potential positive in the company’s favour.
Today’s administration will also impact Northbridge-based Bulletin Resources, which holds 2.5 million shares in Coolgardie, and earns a royalty and profit share from the Geko mine.
Coolgardie had raised $4 million in its August initial public offering.