Friday, March 20, 2015 9:48:14 AM
Bloomburg Business
by Michael BathonLaura J Keller March 10, 2015
(Bloomberg) -- Allied Nevada Gold Corp., the operator of the gaming state’s Hycroft mine, filed for bankruptcy after operational setbacks and lower gold prices eroded profitability at its sole working property.
The company listed debt of $664 million and $941 million of assets as of Dec. 31 in Chapter 11 court documents filed Tuesday in U.S. Bankruptcy Court in Wilmington, Delaware.
Allied Nevada also reached an agreement with a group of bondholders for $78 million in bankruptcy financing to help fund operations while it restructures.
The company has less than $4.5 million in cash as of Tuesday, financial adviser Barak Klein with Moelis & Co. said in the court filings.
The company’s shares traded above $45 in 2011, the year gold prices peaked.
The shares fell 80 percent to 17 cents in New York at 1:15 p.m. on Tuesday. The miner has struggled with operational setbacks at Hycroft, most recently when a chalky substance slowed production and forced Allied Nevada to lower its annual gold and silver sales forecasts.
The Reno, Nevada-based company has also contended with plunging gold prices. The metal dropped 28 percent in 2013, the first annual decline in 13 years, and declined 1.4 percent last year.
As its cash depleted to dangerously low levels, just $1.3 million at the end of November, the company raised $21.5 million, offering equity for $1 with warrants in December. Debt grew to $567.9 million by Nov. 30, including $48 million in cash borrowings under a loan.
Mill Construction
It would cost almost $1.4 billion to complete a mill that it needs to recover more metals, according to a December regulatory filing. The company hired Credit Suisse Group AG and Bank of Nova Scotia in 2014 to advise on options to finance the mill.
The company, incorporated in Delaware in 2006, owns more than 50 Nevada properties acquired in a merger, as well as interests in what it calls some of state’s “most prolific gold-producing trends.”
Allied Nevada will file a pre-negotiated plan with the support of noteholders, who own more than 67 percent of C$400 million in 8.75 percent notes due 2019, according to a regulatory filing. Lenders of its revolving credit line also support the plan, according to the filing.
The company and noteholders began negotiating last month on restructuring options as the company’s cash balance dwindled, people with knowledge of the matter told Bloomberg News at the time.
Noteholders Negotiations
Noteholders in the negotiations included CI Investments Inc., Mudrick Capital Management LP, Third Avenue Management LLC and Whitebox Advisors LLC, people with knowledge of the talks told Bloomberg last month.
Secured lenders will receive a new first-lien term loan and the noteholders will get equity in the reorganized company, under the terms of the restructuring plan.
The noteholders providing the bankruptcy financing will get a convertible second-lien term loan and new common shares as well.
Current shareholders are slated to get warrants to buy equity in the reorganized company if they vote in favor of the plan. Otherwise, they’ll get nothing. The existing stock will be canceled.
The case is In Re Allied Nevada Gold Corp., 15-bk-10503, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Recent HYMC News
- Hycroft Announces Year End 2023 Operating and Financial Results • PR Newswire (US) • 03/14/2024 12:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/13/2024 01:00:17 PM
- Hycroft Announces Start of 2024 Drill Program Targeting High-Grade Silver Discoveries • PR Newswire (US) • 02/13/2024 01:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/09/2024 09:05:44 PM
- Hycroft Delivers More High-Grade - Expands New Silver System at Brimstone • PR Newswire (US) • 01/09/2024 01:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/05/2023 01:00:31 PM
- Hycroft Regains Compliance with Nasdaq Listing Requirements • PR Newswire (US) • 12/05/2023 01:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/28/2023 01:36:28 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/16/2023 01:05:34 PM
- Hycroft Drills Best Hole Ever - Discovers New High-Grade Silver System • PR Newswire (US) • 11/16/2023 01:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/09/2023 10:21:04 PM
- Hycroft Mining Announces 1-For-10 Reverse Stock Split • PR Newswire (US) • 11/09/2023 09:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/31/2023 09:12:13 PM
- Hycroft Mining Announces Third Quarter 2023 Results • PR Newswire (US) • 10/31/2023 08:30:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 10/31/2023 08:15:11 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/26/2023 12:30:37 PM
- Hycroft Mining Announces Reverse Stock Split • PR Newswire (US) • 10/26/2023 12:00:00 PM
- Hycroft Mining Finds Elevated Silver Across the Hycroft System in Phase 2 Drilling • PR Newswire (US) • 10/23/2023 12:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/06/2023 08:34:50 PM
- Hycroft Mining Provides Update on Nasdaq Listing • PR Newswire (US) • 10/04/2023 11:30:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/25/2023 08:05:40 PM
- Hycroft Mining Provides Update Regarding Nasdaq Listing • PR Newswire (US) • 09/25/2023 12:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/12/2023 09:25:09 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/11/2023 08:05:23 PM
- Hycroft Confirms Positive Metallurgical Test Results • PR Newswire (US) • 09/06/2023 12:00:00 PM
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