Vancouver-based Great Panther Mining Ltd. filed a notice of intention (NOI) to make a proposal under Canada’s Bankruptcy and Insolvency Act, which will provide creditor protection while the company seeks to restructure its affairs.
Great Panther Mining is a precious metals producer focused on the operation of the Tucano gold mine in Brazil where it controls a land package covering nearly 200,000 hectares in the prospective Vila Nova Greenstone belt. The company recently completed the sale of several Mexican mines and prospects to Guanajuato Silver Co. Ltd.
After reviewing its cash position, forecasted revenue and expenses, and scheduled debt payments, the company said it will likely default on several material debtor agreements. It cited liquidity constraints stemming from previously disclosed operational challenges, inflationary pressures significantly impacting costs, unforeseen but necessary capital expenditures, and contractor mobilization delays because of equipment availability issues.
The Tucano gold mine will be placed on temporary care and maintenance while Great Panther explores its options. The company said it intends to continue to process stockpiles during the care and maintenance period and work with its suppliers to maximize stakeholder value.
During August, Great Panther said it was transitioning between mining contractors at the Tucano mine. It also reported inflationary pressures for diesel fuel and other consumables as well as accelerated capital spending related to the Tucano tailings storage facility (TSF). Higher-than-normal precipitation during the past two years forced the company to fast-track the expansion of the Tucano TSF, which brought forward $3.5 million planned for 2023, as well as a $2.3 million investment for evaporators to manage water levels in the TSFs.
The effect of the NOI is an immediate stay of proceedings for 30 days, which may be extended by subsequent court order. Alvarez & Marsal Canada Inc. has been appointed as proposal trustee to monitor the company’s operations and restructuring. Information and materials filed in connection with the NOI proceedings can be found on the Proposal Trustee’s website at www.alvarezandmarsal.com/GPR .
