Photo by: Bloombeg
PERTH (miningweekly.com) – Gold developer Aurelia Metals is fighting allegations of insolvency and has turned to the New South Wales Supreme Court to declare the appointment of administrators by diversified major Glencore unlawful.
The ASX-listed company said on Wednesday that refinancing negotiations with Glencore had collapsed, resulting in Glencore appointing a voluntary administrator to Aurelia, without consultation, claiming that the ASX-listed junior was insolvent.
Aurelia has rejected these claims.
The Supreme Court has issued an injunction pending a further hearing on October 14.
Both Aurelia and Glencore have agreed to a court-sponsored standstill, with Aurelia suspending its right to convert two of Glencore’s facilities to equities until the court hearing. Aurelia was hoping that, on the successful completion of the conversion, the company’s outstanding debt to Glencore would reduce by A$79.77-million to A$39.93-million.
Aurelia’s obligations to make amortisation payments to Glencore and Glencore’s right to call the total facilities were been suspended until further order from the court.
Aurelia said that, until the completion of the hearing, the company would continue its usual day-to-day operations, including continued production from the Hera operation, with a particular focus on improving gold recoveries and cost management.
The company was hoping to expand Hera and to raise the necessary capital to support this initiative.
Aurelia shares tumbled nearly 42% on Wednesday to trade at a low of 2.1c each.