Aurelia Metals has secured a Supreme Court injunction after attempts by Glencore to send the company into administration.
Aurelia, which operates the Hera Mine near Nymagee, had an existing funding arrangement in place with Glencore which included regular loan repayments along with the option to convert debt repayments to shares.
However Aurelia announced last week that discussions between the two companies had broken down and Glencore had appointed a voluntary administrator to Aurelia “on the grounds of alleged insolvency”.
In a press release last Wednesday Aurelia rejected the allegation, saying the appointment of the administrator was “invalid” and that the company had obtained orders from the Supreme Court of NSW deeming that the administrator was “not effective until a court hearing on the validity of the appointment can be heard”.
A further court hearing is set for next month.
Aurelia Metals advised that it had intended to convert the debt facilities to shares, reducing the outstanding debt with Glencore from $79.77million to $39.93million.
“Aurelia strongly rejects the appointments as invalid as it considers no event of default has occurred and no event of default is subsisting,” the company said in a media statement last Wednesday. Until the completion of the hearing the company will continue its usual day to day operations, including continued Hera production with a particular focus on continuing the improvement of gold recoveries and cost management.”
The company is also currently in talks with Pacific Road Capital Management regarding capital raising ventures including a loan facility and equity underwriting.