Vancouver — A low gold price and high operating costs have forced Viceroy Resources (VOY-T) to place its flagship Bounty gold mine in Australia under voluntary administration.
The move came as the company’s debts mounted and its management decided that no further financial support would be provided for the operation without a re-capitalization and significant restructuring.
In order to refinance or sell the mine, two Perth-based accounting firms have been granted administrative control of Viceroy’s Australian subsidiaries.
As of Dec. 31, 2000, Viceroy had a net working capital deficiency of $6.2 million, arising from debt due on the Bounty mine in Western Australia and reclamation liability on the company’s Castle Mountain operation.
So far this year, Viceroy has missed a total of A$8.5 million in debt payments due on the acquisition of the Bounty mine. Under the original loan agreement, Viceroy’s failure to pay the principal payments entitle NM Rothchild and Sons to demand immediate and full payment of the debt amount.
Rothchild has until July 4 to decide if it will: enforce its security until the end of the voluntary administration; or exercise its right to take possession of the assets.
Viceroy reported a loss of $5.7 million, or 10 per share, on sales of $20.3 million in the first quarter of 2001. Bounty is an underground operation supplemented by smaller, lower-grade, open-pit deposits. It has a carbon-in-leach plant that is capable of processing 750,000 tonnes per year. In 2000, the gold miner cranked out 263,000 oz.
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