Mine debt revealed as employees wait on final pay
THE administrator of Goondicum ilmenite mine east of Monto has revealed the full extent of the company's debts and says he is "comfortable" employee entitlements will be paid in full.
Pitcher Partners were appointed to the mine on Sunday, September 8, at the request of parent company Melior Resources.
According to Pitcher Partners chairman Bryan Hughes, the administrator's "preliminary view ... subject to further investigation and adjudication" is that trade creditors are owed about $5 million, employees about $800,000, and secured lenders about USD $28 million.
"We are comfortable employees will be paid in full and they will receive outstanding wages and notice this Wednesday, which was their standard pay day," Mr Hughes said.
"Other entitlements such as redundancy and annual leave needs to be adjudicated and will be paid once that process is complete."
A creditors meeting will be held in Monto Shire Hall at 10.30am on Tuesday.
Mr Hughes also revealed that Goondicum has about $700,000 in its bank account plus inventories valued at more than $3.4 million.
"The trading accounts appear at first review to be within normal terms of trade for the resources sector, so I suspect solvency is not an issue," Mr Hughes said.
"A voluntary administrator is appointed when a company is insolvent, or about to become insolvent, and I think in this case it falls under the second limb.
"From my observations, there was a professional and well-advised board on this company."
Mr Hughes said Pitcher Partners were first contacted in regards to Goondicum mine about a week before the administrators were officially appointed.
"The board were in negotiations with the secured lender to obtain additional financial support but they wanted to talk to us to see what their options were in the event those negotiations were unsuccessful," he said.
"These discussions were standard questions about options and the voluntary administration process in the event it may have been required.
"The negotiations with the secured lender were ongoing and the secured lender had not made a decision but the mining contractor (RSA Contractors) got nervous and withdrew their equipment from site on Saturday, September 7.
"The board was rightfully concerned about operations unravelling at that point and others taking matters into their own hands, and to ensure this situation was controlled we were appointed on Sunday morning."