Future of two South Australian gold mines is up in the air after their owner, WPG Resources, was placed in administration
THE future of two South Australian gold mines is in doubt after the company which owns them was placed in administration.
THE future of two South Australian gold mines is in doubt after the company which owns them was placed in administration.
WPG Resources has been placed in the hands of administrators from Ernst & Young, with a creditors’ meeting to be held in Adelaide next week.
A figure for the amount of debt outstanding is yet to be released by the administrators but it is understood to be a significant figure.
WPG operates the Challenger gold mine in the state’s Far West which has been in operation under various owners since 2002.
It also operates a smaller gold operation at Tarcoola.
Both are continuing to operate while the administrators examine the company’s trading situation.
The company itself has told the Australian Securities Exchange that ”the company is insolvent or likely to become insolvent at some future time’’.
The company said it had been in discussions to recapitalise.
“The company regrets to provide the following update to the market on the recapitalisation discussions:
1. Following the withdrawal of a key prospective investor from discussions with the company, it has become clear to the company that it can no longer meet the conditions in the term sheet it entered into with the Byrnecut Entities previously disclosed to the market.
2. Accordingly, the directors have resolved that the company is insolvent or likely to become insolvent at some future time.
3. As a consequence, the company has … appointed Ernst & Young as joint and several administrators.’’
“This is a sad moment for the company and one that directors, employees, consultants, and advisers have worked tirelessly over the last few months to avoid and the directors regret that the decision to appoint administrators has become necessary.
“The company and it’s directors would like to express their appreciation to shareholders, employees and creditors, and in particular the Byrnecut Entities for the support that they have provided during the recapitalisation discussions.’’
The company’s shares have been suspended from trading on the ASX since mid-June and last traded at 1.5c.
cameron.england@news.com.au