Delay over mine bust

ADMINISTRATORS looking into the $30m-plus collapse of two associated companies behind a proposed magnetite iron ore mine southwest of Burnie have successfully applied to extend the time frame allowed for their investigations, citing inadequate books among other issues.

Forward Mining Limited, which was founded in 2010 and granted a lease at Hampshire, 27km southwest of Burnie, in 2015 to develop the Rogetta Mine project, and its treasury arm, Middle Cove Enterprises Pty Ltd, went into external administration on March 9.

According to the reasons for judgment in a recent decision of the Federal Court of Australia, Forward Mining, which has no assets other than the mining lease and $500 cash reserves, is alleged to owe nearly $30m.

This consists of unsecured creditor claims of about $26m and a secured claim of $3,245,160.64 by DLC Group Holdings Family Trust, which holds security over “all present and after acquired property of Forward Mining”.

Mineral Processing Solutions Pty Ltd also “holds security over certain equipment leased to Forward Mining,” Justice Brigitte Markovic said.

Meanwhile, Middle Cove, which has $340 cash reserves and owns no real property in Australia, faces unsecured creditor claims of about $3.5m and a secured claim by DLC.

According to administrator Philip Campbell-Wilson, cited in Justice Markovic’s decision, “the administrators’ investigations into the companies’ affairs have been hampered by the inadequate books and records those companies maintained”. Furthermore, there remains a live question as to whether either company had employees who may be out of pocket.

Administrators are also actively investigating a number of share transfers involving Blythe River Iron Pty Ltd (BRI), which holds a number of mining exploration licences in Tasmania, including at Camena, Hampshire, South Riana and southwest of Penguin.

According to Justice Markovic, Forward Mining was the sole shareholder of BRI up until August 27 last year.

“However, between August 27, 2021, and January 27, 2022, Forward Mining’s shares in BRI were transferred numerous times,” Justice Markovic said.

Justice Markovic granted Mr Campbell-Wilson’s application to extend the administrators’ convening period, at the end of which they are legally obligated to convene a second creditors’ meeting, until June 24.