TORONTO (miningweekly.com) – Tungsten junior Malaga, which owns the Pasto Bueno mine, in Peru, on Tuesday said it could sell its Peruvian assets in an attempt to remain a going concern.
Malaga put the Pasta Bueno mine and plant on care and maintenance in the fourth quarter, which had cast significant doubt about its ability to continue as a going concern.
The company said it was not in a position to meet its financial obligations. At March 31, its working capital deficit was $8.3-million.
The mine remained on care and maintenance and Malaga had put in place more measures to reduce costs as it was examining all possible alternatives, which could result in a sale of a portion or all of its assets.
During the first quarter ended March 31, the company was able to sell copper by-product and realised sales of $1.2-million. It had also cancelled its office lease in Canada, reducing its operating lease commitments for a cash settlement fee of $45 000.
The carrying value of the mine and mill was also impaired during the quarter, resulting in Malaga booking a $2.6-million charge.
In its search for cash, Malaga had also early in April entered into an agreement to sell all of its shares in Hidroelectrica Pelagatos (Hidropesac) for $650 000.
Malaga said it had received a $325 000 deposit and the balance would be received on closing, which was expected to take place within weeks.
Hidropesac owned and operated the 600 kW hydroelectric power plant at the Pasto Bueno property.