Ivernia provided an update on the business and the strategic review process, which began in February, and the extension of the forbearances with its primary lenders Sprott Resources and Enirgi Group.
The company’s Paroo Station mine was placed on care and maintenance in mid-January amid difficult market conditions resulting from low lead prices. Mining operations ceased in January and milling ceased in early February.
Even though the strategic review process is ongoing, the review committee in light of market condition and the company’s liquidity has made several recommendations for immediate action:
- Consult with primary lenders to renegotiate debt repayment obligations, which includes the extension of the forbearance periods;
- Seek to complete a business transaction, such as a merger, sale of the asset, restructure, etc.; and
- Engage with interested parties that have identified themselves as potential buyers.
Sprott advanced Ivernia C$20 million in January 2013; C$5 million of the Sprott Facility was used to fund a transportation bond in Western Australia. The outstanding balance of the Sprott Facility is nearly CAD$14 million. It is secured by all of the company’s assets, including the mine, and contains a number of events of default that, if triggered and called by Sprott, would grant Sprott certain rights and remedies, including rights to accelerate the payment of principal and/or to realize on its security.