PERTH (miningweekly.com) – ASX-listed Atlantic this week unveiled plans to repurchase its Windimurra vanadium project, in Western Australia.

Atlantic in February last year called in administrators for its operating subsidiary Midwest Vanadium, which owns the Windimurra project, after the company’s noteholders and major shareholders were unable to agree on the restructure of Midwest Vanadium.

Discussions between shareholder Droxford International and the noteholders have been under way since early 2014, regarding additional funding required to implement Midwest Vanadium’s business plan to restart the Windimurra project, after a fire ripped into the beneficiation plant, causing some A$100-million in damages.

Atlantic said this week that with the support of Droxford, the company had submitted a proposal to the administrators to enter into a deed of company arrangement to acquire the Windimurra project.

In exchange for the transfer of the project, a newly incorporated wholly-owned subsidiary of Atlantic would pay A$250 000, which would be distributed to the administrators and unsecured creditors. A further A$1-million deposit would be paid to the receivers, which would be refunded upon the completion of the transaction.

In addition to acquiring all the assets associated with the Windimurra project, the new subsidiary would also receive a portion of any future income tax refunds payable to Midwest Vanadium, to offset any further reimbursements required by the company to Atlantic, on account of past business interruptions insurance proceeds allocated to Atlantic, but deposited with Midwest Vanadium.

In return, the senior secured noteholders would release their security over the assets of Midwest Vanadium outside of the transaction, and would be limited in recourse to the excluded assets.

Droxford would waive its entitlement to any priority part repayment of its A$29.7-million secured loan facility agreement with Midwest Vanadium, and would not participate in any secured lender distribution and release its security over the Midwest Vanadium assets.

The transaction would be subject to a number of conditions, including Foreign Investment Review Board approvals, creditor approvals and the senior secured noteholders consenting to the release of their security.

Atlantic stated that while some A$560-million had been invested in the Windimurra mine to date, vanadium processing would currently not support the redevelopment of the project.

As a result, Atlantic would institute a structured care-and-maintenance plan for the project, in the hopes of redeveloping Windimurra when market conditions improved.