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Van Dieman Mines

  • BY: Andrew Hore |
  • POSTED: 27/02/2009 |

Van Dieman Mines has appointed an administrator to its Australian operating subsidiary.

Paul Cook & Associates was appointed as administrator on 27 February 2009.

Van Dieman says that Galena Special Situations Master Fund demanded repayment of the convertible loan note facility, which was worth a total of £6.75m. Van Dieman asked for the final tranche of the loan note, worth A$620,000, and for a further A$2m. The cash would have been used to complete the trial tin mining process at the Scotia mine in Tasmania.

This seems to have made Galena reassess the situation. It did not want to increase its exposure to the project. Galena has fixed and floating charges over nearly all of the group’s assets, which should limit its downside.

Van Dieman says that it is still talking to Galena about a financial restructuring for the operating company and the administrator will become involved with these discussions.

Problems have included delayed production and lower than expected metal grades. The fall in the tin price means that Scotia will not generate cash at this price.

Shares in Van Dieman were suspended at 0.875p each on 24 February 2009, which valued the tin miner at £1.35m.

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