Great Panther to delist from TSX, NYSE as it seeks creditor protection

Great Panther Mining (TSX: GPR; NYSE: GPL) has stopped trading in Toronto, and is subject to delisting both at home and in New York, after announcing it had filed for creditor protection.

The cash-strapped Canadian miner warned on Tuesday that it would likely default on several material debtor agreements owing to liquidity constraints.

Great Panther has also placed its Tucano gold and silver mine in Brazil in care and maintenance while its local subsidiary undergoes a court-supervised arrangement with its creditors. 

The Brazilian unit, Mina Tucano, and its shareholders filed on Wednesday for what is referred to as a judicial reorganization in the judicial district of Rio de Janeiro.

Under the reorganization process in Brazil, the subsidiary and its shareholders will remain in possession of their assets as well as maintain control and manage the business, while it attempts to restructure operations. 

The Vancouver-based company is exploring its options while continuing to operate the business but warned that a failure to achieve its restructuring goals through an approved proposal would result in bankruptcy.

The delisting review from the Toronto exchange is scheduled for Sept. 16. The South America-focused miner has also received notice from the New York exchange that proceedings for delisting have begun and Great Panther has just seven days to appeal the decision.

A jumbo drill underground at Great Panther’s Guanajuato mine complex in Mexico. Photo credit: Great Panther Silver.

The news comes just over a month after Great Panther closed the sale of its Mexican silver assets in early August. The move was meant to allow the company “to focus on maximizing the full potential of the Tucano gold mine in Brazil,” said Alan Hair, chair and interim CEO in a news release on June 29.  

The sale to Guanajuato Silver Company included the Guanajuato Mine Complex in Guanajuato state, about 380 km northwest of Mexico City; the Topia mine in northwestern Durango state; the El Horcón project in the western state of Jalisco and the Santa Rosa project just north of Guanajuato City in Guanajuato state. 

In return for the assets, Great Panther received US$8 million in cash on closing, plus about US$1.3 million subject to a working capital adjustment; and 25.8 million common shares of GSilver, valued at around US$6.7 million as of June 29. The agreement also outlined additional payments of up to US$2 million if the silver price or production from the assets reached certain thresholds.

About US$3.4 million of the sale proceeds were used to repay outstanding debts towards a lead concentrate prepayment agreement between Minera Mexicana, Great Panther and Samsung C&T U.K, a subsidiary of Samsung C&T.