Alita Resources moves into voluntary administration

Image: Alliance Mineral Assets

Lithium miner Alita Resources, formerly Alliance Mineral Assets, has entered into voluntary administration after its directors decided the group of companies was insolvent or likely to become insolvent in the future.

Alita has appointed KordaMentha as the administrator for the company and its five subsidiaries: Alliance Mineral Assets Exploration, Tawana Resources, Lithco No. 2, Tawana Gold and Waba Holdings.

The company has been negotiating the terms of a potentially viable restructure proposal from a consortium of unsecured creditors, existing shareholders and new investors, in conjunction with its new unsecured lender, according to an ASX statement.

KordaMentha stated it would shortly meet with key stakeholders to reduce the “ongoing monthly cash burn” at the Alita Group’s operations.

Alita owns the Bald Hill lithium and tantalum mine in Western Australia, and has a 15 per cent interest in the Cowan lithium project adjacent to Bald Hill.

The company reportedly owes Primero Group $325,000 of unpaid accrued work-in-progress as part of a contract this year.

Primero was also awarded an engineering, procurement and construction contract at Bald Hill last year ahead of the mine’s first lithium concentrate production.

Alita’s $40 million secured loan facility, which its largest shareholder Galaxy Resources has recently acquired, is also at a standstill.

Galaxy will work with its appointed receivers KPMG and the voluntary administrators to determine a course of action for the Alita Group.

Alita will make further announcements in relation to its restructure or recapitalisation process in due course.

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