Pleasure Point Mine in administration with $32m debt before starting operations

A new mine near Toowoomba has gone into administration owing $32m before it ever started extracting from the ground.

Pleasure Point Mine from above. Image: Pleasure Point Mine website.

A silica mine near Toowoomba has gone into administration with about $32 million in estimated debts, before it ever started extracting from the ground.

Pleasure Point Mine is a sand quarry in Helidon, 110 kilometres west of Brisbane and about 20 kilometres east from Toowoomba.

The company was registered in October 2019, but hadn’t yet commenced trading or extracting from the site, only having completed survey assessments which confirmed the ground had commercial quantities of sandstone and silica sand.

Pleasure Point Mine went into voluntary administration in March, with a new report lodged with ASIC this week revealing it owed $32.7 million in estimated debts.

Its wholly owned subsidiary BRS Quarries Australia held its mining lease and Environmental Protection Agency permit - but it has also entered administration, owing up to $1.6 million.

A related company, Responsible Entity Services, was a secured creditor and was owed the bulk of Pleasure Point Mine’s debts, estimated to be $31.1 million, a report from administrator Aaron Lucan of Worrells said.

Responsible Entity Services had initially funded the assessment and development of the Helidon mining site, but it went into liquidation in August last year.

The liquidator of Responsible Entity Service has also appointed receivers to Pleasure Point Mine.

Pleasure Point Mine. Image: Pleasure Point Mine website

The mine secured further investment from US company SA Services International, which received 1,000 shares in the company in exchange for its funding.

Under the agreement, the US company took steps to pay Pleasure Point Mine’s outstanding debts and to make repayments to Responsible Entity Services, the administrator’s report said.

But Responsible Entity Services rejected a proposal from SA Services International, before directors then placed Pleasure Point Mine in administration.

SA Services International is now owed an estimated $1.2 million from Pleasure Point Mine and a further $507,068 from BRS Quarries Australia.

Other unsecured creditors for Pleasure Point Mine, including the Australian Energy Initiative, Groundwater Assessment & Solutions, and Mining Resources and Logistics Group were owed a further estimated $400,000.

Mr Lucan wrote the insolvency of the company was down to inadequate working capital, budgeting and financial management and potential misuse of the funding for the site’s development.

He warned the company may have been insolvent from June 2023, but the majority of the debts incurred since then were interest and fees.

The report also said there were potentially uncommercial transactions, including $4.3 million paid to related company Foxi Capital AU, formerly known as RAIC.

Shaun Fox, a former director of Pleasure Point Mine, was the sole director and shareholder of RAIC.

He was banned from providing financial services for eight years and placed three of his companies, including Foxi Capital AU, into voluntary administration in 2023.

Corporate regulator ASIC found Mr Fox set up Foxi Capital AU in 2020, offering customers investments including units in the Pleasure Point Mine Unit Trust.

Pleasure Point Mine’s site. Image: Pleasure Point Mine website

ASIC reported Mr Fox told investors they could roll their investments in older property schemes into the trust on similar terms, but investors who accepted the offer didn’t receive certificates or appear on the unitholder register.

It also said he “represented that he had gifted investors equity through shares in Pleasure Point Mine” but the investors did not appear on the company’s shareholder register and didn’t receive share certificates.

The report noted another potential uncommercial transaction was made to Foxi Invest, a company it paid $330,781 for marketing and related expenses, although Mr Lucan hadn’t found any proof of marketing activities during the period.

Mr Fox remains the owner and director of one of Foxi Invest’s shareholders.

Creditors could vote to liquidate the company in a meeting next week, but the administrator has recommended against that.

Creditors could accept a deal in the form of a Deed of Company arrangement (DOCA) from one of the company’s shareholders, Swift Mining Resources, which is expected to return a larger payout than liquidating the company.

Swift Mining Resources also shared a common director with Pleasure Point Mine, Mr Camp.

Under the agreement, creditors would share from a DOCA fund, which would comprise $6.3 million.

Pleasure Point Mine in Helidon, close to Toowoomba. Image: Pleasure Point Mine website

Responsible Entity Services would be expected to receive 19.1 cents per dollar owed, compared to up to 17.2 cents per dollar in a liquidation scenario.

Unsecured creditors would be expected to receive 23.98 cents per dollar, compared to no return or up to 8.2 cents per dollar in a liquidation.

The company has had two final binding offers for a sale of the company’s assets and BRS - however the administrator warned he had concerns about the legitimacy of one offer for $29.6 million.

The second offer of $6.1 million appeared genuine, with “sufficient evidence to provide comfort that they would be able to complete a sale where they selected to proceed”, the report said.

The offer was subject to further due diligence.

News Corp has contacted the company and Mr Dinovitser for comment.

Originally published as Pleasure Point Mine in administration with $32m debt before starting operations