Photo by: Bloomberg
PERTH (miningweekly.com) – Embattled nickel miner Mirabela Nickel has warned that it would impose forced leave on around 350 staff at its Santa Rita mine, in Brazil, as it looked for funding to support ongoing operations at the mine.
Mirabela, which went into voluntary administration in February, told shareholders that the group of note holders, which had previously provided the company with a recapitalisation proposal, was now reviewing its commitment to provide further funding to support operations at Santa Rita.
The consortium of holders, which currently hold Mirabela’s $395-million senior unsecured notes, due in April 2018, had previously agreed to a $45-million interim financing facility.
Mirabela told its shareholders that the administrators and the note holders were continuing their discussions to progress the proposed recapitalisation proposal, while the administrators would also investigate other proposals.
Meanwhile, the nickel miner was faced with more bad news after it was revealed that the company might not qualify for tax credits in Brazil.
In November last year, one of Mirabela’s offtake partners, Votorantim Metals Niquel SA, declared a force majeure after a malfunction of its main transformer at its smelter. The force majeure resulted in Votorantim reneging on a nickel purchase agreement with Mirabela.
As a result, Mirabela had no option but to find an alternate purchaser for the nickel concentrate previously being sold to Votorantim. During the fourth quarter, the company secured a short-term offtake agreement with an international trading house, and while the terms of the agreement were deemed to be less favourable than the Votorantim offtake agreement, it provided Mirabela with a buyer for its product until the end of June this year.
However, as a result of shifting to an international offtake partner, certain Brazilian state and federal input tax credits, which were previously available to the company, were unlikely to be available going forward, as the credits could only be claimed for domestic sales.
The unavailability of these credits were expected to have a negative impact on the company’s cash flow and on the underlying value of its assets.
Mirabela was seeking advice to confirm the monetary impact of the changes.