PERTH (miningweekly.com) – Administrators have been called in at ASX-listed Red River Resources.
Company MD Mel Palancian resigned in July this year, followed by chairperson Brett Fletcher and nonexecutive director Ian Smith in August, while its subsidiary Cromarty Resources was placed into voluntary administration in October owing to ongoing operational issues at the Thalanga base metals operation in Queensland.
Underground operations at Thalanga were suspended between August 2 and August 19, following a fall-of-ground event, which significantly impacted the mining schedule and mining rate.
The Hillgrove gold project was also placed on care and maintenance in the September quarter, with Red River examining options to determine the optimum development strategy for the mine.
With Cromarty going into administration, Red River provided a guarantee to financier Trafigura in relation to a working capital facility between Cromarty and Trafigura.
At the end of the September quarter the working capital facility was drawn down by a total of $9-million with $6-million remaining undrawn.
Since October, Red River has been in discussions with various stakeholders regarding options to preserve shareholder value, with the company saying on Wednesday that a common pre-requisite to all options pursued was the agreement with Trafigura on its intention over exercising its legal rights against Red River under the guarantee.
To date, Red River has been unable to obtain an agreement from Trafigura on a timely basis, hampering the company’s ability to raise new capital and resulting in the voluntary administration.