FTI Consulting will continue to care and maintain the Woodlawn zinc-copper mine following Heron Resources’ decision to enter voluntary administration after struggling to restart the operation.
The mine had been inoperative since March 2020.
On Friday, Heron’s board of directors appointed Chris Hill, David McGrath and Mike Ryan of FTI Consulting as voluntary administrators of the company and its subsidiaries.
The appointments follow a resolution by the Heron’s directors that the company has been unable to secure a suitable transaction for Woodlawn through the strategic process announced in August 2020.
According to a company statement, Heron and its advisors have conducted a comprehensive and wide-ranging process, engaging with more than 90 organisations, in an effort to secure a suitable outcome for its stakeholders and establishing a pathway to restart its Woodlawn zinc-copper mine.
“With creditor forbearance coming to an end next month, and none of the alternatives investigated during the strategic process being capable of implementation before then given the current capital structure of the company, the appointment of administrators to the group companies has been made with a view to effecting a restructure and re-capitalisation through the administration process,” Heron stated.
The Heron expects the administrators will progress restructure proposals with various parties, including new and existing stakeholders and the secured lender.
“Our intention is to continue the care and maintenance regime for the Woodlawn mine whilst we undertake a process to restructure and refinance the business, with the objective of bringing it out of administration as soon as possible,” Hill said.
“We are committed to working with the Heron management team and will shortly commence a process seeking interest from parties for the participation in the company’s re-capitalisation.”
Heron’s board of directors thanked employees, counterparties and shareholders for their support, particularly during the difficult circumstances since the outbreak of COVID-19 during the Woodlawn ramp up and the placing of the mine into care and maintenance.
The administrators will be in direct contact with creditors and key stakeholders in the group companies and will make further announcements when there are material developments.