Gascoyne lead and silver miner Abra Mining has tumbled into administration with KordaMentha partners pursuing a potential sale or recapitalisation deal for the company.
Gascoyne lead and silver miner Abra Mining has tumbled into administration with KordaMentha partners pursuing a potential sale or recapitalisation deal for the company.
Perth-headquatered Abra Mining is 60 per cent owned by ASX-listed Galena Mining, and is a subsidiary of that miner, and 40 per cent by Toho Zinc Co- a Japanese manufacturer of zinc related products.
It owns and operates the Abra lead-silver mine located between Meekatharra and Newman in the Gascoyne. The mine is 60 per cent owned by Galena and 40 per cent owned by Abra Mining.
Galena told the ASX this morning that its subdidiary Abra had appointed administrators on April 4, citing previous announcements outling ramp-up issues with mining rates, mined grade and recent rainfall events restricting haulage operations.
Separately, KordaMentha said the appointment followed a concentrated effort by the company and its stakeholders to recapitalise the business.
Administrators Richard Tucker and Robert Hutson will continue mining and processing plant operations, while they chase offers to recapitalise or sell the company or its assets.
“The Abra mine is a world class asset with an initial mine life of more than 13 years as well as considerable exploration potential with copper-gold mineralisation below the lead-silver deposit,” Mr Tucker said.
“We intend to continue to operate the mine during the administration while we seek offers to recapitalise the company through a sale or deed of company arrangement process.
"We are asking all suppliers and stakeholders to work with our team to ensure value is preserved and a sale or recapitalisation can be completed as quickly as possible for the benefit of all stakeholders.
“This is an excellent asset that will attract considerable interest from local and offshore investors.”
ASX-listed contractor GR Engineering had a contract with Abra Mining to relocate, refurbish and commission the Abra-owned Higginsville paste plant, which has been delivered.
The contract included deferred payment terms under which Abra Mining had been making monthly payments to GR Engineering.
The contractor said its current exposure for remaining payments was $8.5 million. But it said the administrators confirmed the payments would continue.
GR said any adverse impacts to its financial results would be immaterial.
