Above: Royal Papua New Guinea Constabulary parade at Mt Kare. Photo: Nigel Nawara
Leo Wafiwa | PNG Loop
The directors of Summit Development Limited (SDL), the developer of Mt Kare gold project have advised all stakeholders that the company is not in liquidation as per “some rumours’’.
Director of Summit Development Limited, George Niumataiwalu, today said the parent company of SDL, Indochine Mining Limited (IDC) was placed into voluntary administration by the directors of IDC. Therefore the company appointed Darren Weaver, Ben Johnson and Martin Jones as Joint and Several Administrators pursuant to section 436A of the Corporations Act 2001.
“It is important to note that this appointment only relates to IDC and not its subsidiaries.
“Voluntary administration (in the Australian context) is a procedure where the directors appoint an external administration whose role is to work with the directors to develop and implement a financial re-organisation solution for the benefit of all stakeholders,” the Fijian director said.
He explained that the ultimate aim of a voluntary administration is to achieve an outcome that results in a better return to stakeholders than would otherwise have been achieved in a winding up.
“The appointment of voluntary administrators does not necessarily mean that the company is going into liquidation. The board and management of IDC have been, and will continue, in conjunction with the administrators, to seek to secure the necessary funding to provide for the long term, viability of Mt Kare.
“IDC remains committed to turning Mt Kare into a profitable, long life operation.”
Mr Niumataiwalu said that the decision to place the company into voluntary administration did not enforce any action upon Summit, a PNG subsidiary of IDC and they would, for the most part, continue business as usual except that the administrators would direct the affairs of the parent company.
Mr Niumataiwalu added that as to the Mt Kare project, the administrators had been in contact with the Mineral Resources Authority (MRA) in preparing for a restructure of the project, to maximise returns to all creditors and preserve its future value for landowners and creditors alike.
Indochine was placed into a voluntary administration in late March this year after it failed to secure sufficient funding for its Mt Kare project. The funding failure arose when unnamed interested parties to the project withdrew their funding offers.
It was reported earlier that Indochine had cash of A$413, 000 (about K900,000) at the end of December 2015 and had raised $500, 000 (K 1.4 million) in February. However, the company also has a $3.75 million (K10 million) loan which is due at the end of next month.
In an attempt to build sufficient funds, the company had aggressively cut costs, going from a burn rate of more than $1.2 million (K3.3 million) a month in the middle of last year to less than $250, 000 (K680, 000) as reported by MiningNews.com.