Wiluna Mining collapses

Gold play Wiluna Mining has appointed administrators after months of growing pressure.

FTI Consulting's Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian Francis have taken charge of the company, according to an ASX release this morning.

Wiluna’s market capitalisation was $74 million before trading was halted, while Data & Insights shows the business produced 40,811 ounces of gold in the 12 months to March.

Shares had changed hands at more than $1 a piece earlier this year, but were down about 80 per cent since then.

Business News revealed in May that Wiluna (formerly Blackham Resources) was working on a capital raising to save the business and had picked Lazarus Corporate Finance as its broker.

The company fell about $20 million short of an $84 million funding target.

Chairman Milan Jerkovic resigned earlier this month.

“The administrators have been advised by management that due to the impact of increasing cost pressures, tightening terms of creditor payments, the impact of Covid 19 on staff availability, project ramp up issues and worldwide shipping constraints there is insufficient working capital to bridge the project to complete the development of the reset mine plan,” the ASX announcement said.

“Although Wiluna Mining has investigated options to address that cash flow shortfall, through obtaining financial accommodation from creditors and shareholders, it has become apparent that those options will not successfully address the cash flow shortfall in the time available.

“As a consequence, the directors have determined to appoint voluntary administrators to Wiluna Mining.”

Wiluna produced about 288,000 ounces of gold in the past five years, according to Data & Insights.

Contractor Byrnecut is still operating on the mine site and working with administrators.

It is understood Byrnecut is owed for about a month and a half of work.

Only a few weeks ago, the business had converted outstanding debt into equity in Wiluna.

"Frustrating is putting it mildly," Byrnecut executive chairman Steve Coughlan said of Wiluna's failure.

"We, along with others, chipped in money, and weeks later it goes into administration."