TORONTO (miningweekly.com) – The TSX has deferred a decision to delist Mongolia-focused coal miner SouthGobi Resources’ stock to late next month.
The company believed that the extension would give it enough time to continue implementing its proposed funding plan and allow it to demonstrate that it would be compliant with the continued listing requirements of the TSX.
SouthGobi received confirmation on Friday that the TSX had extended the review and would meet on June 22 to consider whether the company had met the listing requirements of the TSX. The committee was expected to issue its decision on a potential delisting by no later than June 24.
The TSX had placed the company on a remedial delisting review in connection with its reliance on the ‘financial hardship’ exemption that allowed it to complete a private placement with Novel Sunrise Investments without seeking shareholder approval.
SouthGobi, a subsidiary of Rio Tinto-owned Turquoise Hill Resources, reported that the delisting review was customary practice under TSX policies, triggered when a listed company relied on the financial hardship exemption.
Cash strapped SouthGobi on Thursday reached an agreement with creditor China Investment Corporation (CIC) to defer a $7.9-million cash interest payment under the CIC convertible debenture until July 22.
The company in February announced that it had entered into a private placement for proceeds of up to $7.5-million with Novel Sunrise as a proposed new significant investor and strategic partner.
On May 12, SouthGobi requested an extension of the delisting review following delays in closing of the share purchase agreement and the associated delays in implementing the company’s proposed funding plan.
TSX- and Hong Kong-listed SouthGobi operated the flagship Ovoot Tolgoi coal mine that produced and sold coal to customers in China.