Mothballs for Bald Hill
THE Bald Hill lithium mine is set to be placed into care and maintenance after owner and lithium producer Alita Resources entered into voluntary administration.
After its directors decided the group of companies was insolvent or likely to become insolvent in the future, Alita 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 had 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.
The move comes after ASX-listed Galaxy Resources gained effective control of the company by purchasing a US$28.8m debt exposure to its troubled smaller peer.
Galaxy bought the debt from a group of lenders led by fund manager Tribeca Investment Partners, making Galaxy a secured lender to Alita as well as its largest equity holder.
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 Kambalda, WA, and has a 15pc interest in the Cowan lithium project adjacent to Bald Hill.
The Bald Hill hard rock lithium operation, which entered commercial lithium concentrate production in 2018, boasts a top quality +1mm spodumene concentrate (low mica, low iron) and a significant tantalum by-product production.
It is understood Alita also owes money to the Primero Group, which had been engaged to complete the design, procurement, construction and operation of the dense media separation circuit at Bald Hill.
Alita’s receivership is in the wake of an oversupplied global lithium market, which has left Australia’s miners feeling the pinch.