No wages, cash, fuel or food: Aurora Metals in dire state
Workers at a Far North mine were on their third fortnightly cycle of unpaid wages and there was not enough food in the camp when administrators of collapsed company Aurora Metals arrived to assess the dire situation.
Cairns
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Workers at the Aurora Metals mine at Chillagoe are owed more than $1.1m in net pay and were on their third fortnightly pay cycle of unpaid wages when administrators KordaMentha stepped in on June 30, according to minutes of the first meeting with creditors.
KordaMentha’s Richard Tucker, David Osborne and Tony Miskiewicz were appointed by the Federal Court as the company’s administrator in early July, after a business stepped in to protect its position over unpaid debts.
Mr Miskiewicz outlined the appalling state of the company’s finances at the meeting on July 12, saying Aurora had no cash, no fuel and not even enough food for its remaining site workers.
“Camp services had been brought back to a minimum with very little food on site when the administrator’s staff arrived (on July 1),” Mr Miskiewicz said.
“The food on site was insufficient.”
The minutes of the meeting show that debts of more than $280m have been submitted against the company,
The major claim, from customer China Railway, is $195m, but many Far North businesses are owed money.
Former company director Ralph De Lacey, whose address is in Cairns, has been issued with a cease and desist notice.
“The administrators were aware that the former managing director, Keith De Lacy, had taken contact details of the company’s creditors and employees and appeared to have emailed stakeholders asking them to send a general proxy to a solicitor of his nomination,” the minutes state.
Mr Miskiewicz said legal advice indicated this was a breach of his director duties, and he was issued with a cease and desist notice by the administrator’s lawyers.
It is understood Mr De Lacey was attempting to get votes to replace the administrators.
Mr De Lacy, who was reportedly on a salary of more than $380,000, claimed to be owed $1.66m, but the minutes state “no supporting documents were attached to the proof of debt and the debt was not supported by company records on hand”.
Information on the Aurora website stated it went on the market last November and in mid-January the sale was put on hold.
“Overall, the result from the sale process was disappointing,” Mr De Lacey said in a statement.
“The sale process attracted the usual raft of time wasters.”
He said the sale would be revisited in six months and the company would try to recapitalise in 2023.
The website no longer exists.
Attempts were made to contact Mr De Lacey for comment.
Cairns-based Max Stocks Food Service is owed more than $70,000 and Mareeba Tyre Services is owed more than $15,000, among others.
The company’s financiers have appointed receivers over the top of administrators.
Aurora’s mines are now under the control of receiver Grant Thornton, acting on behalf of the company’s major secured lender, Mt Garnet Mineral Finance, which claims to be owed $34.7m.
ASIC documents show other directors are Sydney-based Ze Huang Cai, Yading Wan, Xudai Sun, and Lucy Nicholson Rowe.
Mr Miskiewicz said he had made an urgent application to the federal government’s Fair Entitlement Guarantee scheme to ask Employment Minister Tony Burke to exercise his ministerial powers, which would allow workers to get access to payments from the scheme before Aurora was liquidated.
Auctus Resources, a subsidiary of Aurora, owns all the Chillagoe-based assets.
The company had already received all its payments from sales of base metals products from its mines and had “very little” inventory on hand for future sales, Mr Miskiewicz told creditors.
Aurora owns four underground mines, including King Vol and Mungana, a 500,000 tonne-a-year processing plant at Mt Garnet, and a 600,000 tonne processing plant near the North Queensland town of Chillagoe.
Aurora closed its operating mines in May and June, laying off about 150 workers.
Formerly known as Consolidated Tin Mines, the bulk of Aurora’s assets are effectively a reconsolidation of those owned by failed company Kagara – a company once worth as much as $1bn, which collapsed in 2012.
Legal action launched by KordaMentha to protect its position suggests those investigations could spell trouble for Aurora’s former directors, with submissions made to the court indicating its board had previously refused to appoint voluntary administrators despite falling behind on a repayment plan to key creditors.
Aurora considered a float on the Australian Stock Exchange last year but failed to get investors in its initial public offering.
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Originally published as No wages, cash, fuel or food: Aurora Metals in dire state
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