Queensland miner Aurora Metals collapsed with no cash, fuel or even food for workers
Queensland miner Aurora Metals had no cash, no fuel, and not even enough food for its remaining site workers when administrators walked through the door, it can be revealed.
Collapsed Queensland miner Aurora Metals had no cash, no fuel, and not even enough food for its remaining site workers when administrators stepped in to take control of the company’s affairs.
Aurora operated its mines without insurance from May after failing to pay its bills, and Queensland small businesses which were owed hundreds of thousands of dollars had cut off the supply of groceries and fuel to its mines – one of which had also lost power after being disconnected by state-owned Ergon Energy.
KordaMentha administrator Tony Miskiewicz detailed the shocking state of the company’s finances at the first meeting of the company’s creditors on Wednesday, telling the dozens of staff and small business owners attending the virtual meeting Aurora had been in a “dire” financial position before contractor Emeco – owed $13.7m by Aurora – installed the insolvency group at the end of June.
According to minutes of the meeting, The company had missed three successive fortnightly pay runs when KordaMentha took control.
Mr Miskiewicz told staff 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 is liquidated.
“Wages and redundancies had not been paid in June, totalling approximately $1.1m in net pay. Employees were on their third fortnightly pay cycle of unpaid wages. Superannuation of some $720,000 was also owing,” the report says.
While KordaMentha is still going through the details of Aurora’s books, The Australian understands the total sum owed to staff will likely be more than $3m.
There was no cash at bank for the head company, and very limited cash in certain other subsidiaries, Mr Miskiewicz told creditors. The company had already received all of its payments from sales of base metals products from its mines and had “very little” inventory on hand for future sales.
Shockingly, Mr Miskiewicz said the company was also running out of supplies to feed its remaining workforce on sites – and had no fuel to run vehicles and mining equipment.
“Camp services had been brought back to a minimum with very little food on site when the administrators staff arrived. The food on site was insufficient to support the number of employees on site,” he said.
The minutes of the meeting show that debts of more than $280m have been submitted against the company after its collapse. The company’s major customers China Railway Materials and a subsidiary lead the list with initial claims of $195m.
That figure is likely to be challenged, however, and may not reflect the total owed to the two companies.
Another company, Cyan Stone – believed to be a major shareholder of Aurora – claims to be owed $32.6m as an unsecured creditor.
But the minutes of the meeting also show smaller claims from dozens of local businesses which supplied the company’s operations, including $3500 not paid to a local hardware store, more than $25,000 to two separate small tyre fitting companies, and more than $70,000 to the Cairns-based food wholesaler which supplied the company’s camps.
Aurora’s mines are now under the control of receiver Grant Thornton, acting on behalf of the company’s major secured lender, Mt Garnett Mineral Finance, which claims to be owed $34.7m.
The minutes of the meeting say that Grant Thornton had advised KordaMentha that wages for staff still working for the company between June 30 and July 9 would be paid this week.
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.
All are now in care and maintenance.