PERTH (miningweekly.com) – Namibia-focused Shaw River Manganese on Monday went into voluntary administration, after the price of manganese fell by more than 50% since 2015.
The ASX-listed company told shareholders on Monday that while it had a credit line with a major shareholder that had not yet been exhausted, beyond an initial loan amount, all additional drawdowns were at the discretion of the lender.
While the lender continued to advance loan funds through much of 2015, its capacity to advance further funds had been limited.
Meanwhile, shareholders failed to respond to Shaw River’s November/December plight to participate in a share purchase plan, which had been aimed to assist with working capital and, if sufficient, to reduce debt obligations.
Furthermore, Shaw River had been unable to secure any assurances from third-parties relating to possible fund raisings in the short term, despite entering into discussions with various parties and pursuing a debt restructuring as a precondition for a potential fund raising.
Shaw River said that despite the company’s best efforts to reduce costs and to raise funds, management and the board had formed the view that it should appoint administrators to assist in the formal restructuring of the group, with a view to resume share trading once the market recovered.
Most staff at the Otjozondu operation have been on leave over the Christmas and New Year period, with the project continuing with a minimal crew to beneficiate product from mined ore stock, with the intention of meeting sales commitments in January.