Beleaguered gold company Cleveland Mining has called in voluntary administrators due to the company’s financial troubles.
The company was voluntarily suspended from ASX trading in October 2016 and has struggled to refinance its debts.
Revelations emerged last year through a Fairfax Media report that Cleveland Mining Group stock had been artificially inflated from 2011–2012 as part of a ‘pump-and-dump’ scheme by two former advisers at investment firm Macquarie Bank’s private wealth division.
The brokers helped to push investment in a Brazilian iron-ore project (Ferradura) with a projected value of up to $34 billion that turned out to not be a real prospect, with claims having been fabricated or trumped up to spruik Cleveland stock.
In mid-2016, Cleveland signed a pre-pay agreement for $US25 million in return for delivery of 32,400 ounces (oz) of gold within 42 months, a deal that would allow Cleveland to refinance its existing debts, but this failed to transpire.
In April 2017, the company had agreed to restructure terms with Guidepost Solutions, which fell through due to Guidepost’s resignation. In July, another liquidator was appointed and the company worked on further finance agreements to allow debt settlement and re-instatement on the ASX; in December, Cleveland then made further arrangements with FTI Consulting of Perth.
In the company’s ASX statement from December last year, Cleveland managing director David Mendelawitz said that he was “well aware that shareholders and stakeholders have been very frustrated due to the prolonged suspension of the company’s shares and lack of information coming from the company throughout the year,” but hoped that the company could “put the difficult times behind us and get back to where we want to be focused, namely drilling and digging, and far away from these unwanted corporate distractions.”
Richard Albarran, Brent Kijurina and Cameron Shaw from Hall Chadwick Chartered Accountants have been appointed as the voluntary administrators of Cleveland. Further announcements regarding the status of the company’s administration are expected via the ASX in future.