TORONTO (miningweekly.com) – Colorado-based gold miner Atna Resources on Thursday filed for Chapter 11 bankruptcy protection, saying operational problems at its Pinson mine, in Nevada, the low gold price and a lack of investor interest had rendered it without sufficient liquidity to meet obligations.
Atna had filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the District of Colorado and would seek simultaneous relief in Canada under the Companies' Creditors Arrangement Act, in the Supreme Court of British Columbia, in Vancouver.
The company intended to restructure its business by selling its assets, resolve various challenges related to its main assets and seek to modify its capital structure.
"The low gold prices in 2015, the continued indifference in the market for gold company equities, a lack of capital in the mining sector, a lack of development capital, operating issues resulting in a significant shortfall in third-quarter gold production at the Pinson mine and a depressed market for the sale of idled mining equipment negatively impacted the company's outlook and led to the company's current liquidity problems," president and CEO James Hesketh stated.
Atna advised that operational issues since the start of the fourth quarter at the Pinson underground mine had resulted in reduced cash flows and its subsequent illiquidity. Atna had also, in July, halted mining operations at Briggs, near Death Valley, California, as a result of falling gold prices.
The company stated that $19.1-million in debt was due on January 31, under its principal credit agreement with lender Waterton Precious Metals Fund II Cayman. This debt would have to be refinanced or restructured.
Owing to its ongoing liquidity issues, Atna had failed to meet certain financial obligations and liabilities this month.
In a court filing, Atna advised that it was seeking court permission to use a $4-million financing package from Waterton to finance its restructuring.
“The debtors believe additional time and resources are necessary to successfully maximise value at the mines. In their restructuring, the debtors will be able to explore alternatives to strengthen the company, while addressing the challenges the debtors have faced,” Atna stated in filings.