Pressure mounts on embattled Atlantic
Financial pressure is mounting on Atlantic after the company advised it had missed a $5 million debt repayment and that it would take about nine months to rebuild the fire-damaged plant at its Windimurra vanadium project.
Atlantic shares have been in suspension since a fire ripped through the beneficiation plant at Windimurra near Mt Magnet on February 4.
The company had been trying to determine the extent of the damage and begin discussions with its insurers regarding a claim.
Atlantic said it was also working with insurers to secure progressive payments under its comprehensive material damage and business interruption insurance policy that covers the Windimurra fire.
"While at this early stage all estimates are preliminary in nature, the company believes that it could take approximately nine months to rebuild the fire-damaged beneficiation plant and to ramp up production back to where it was prior to the fire," Atlantic said in a statement.
"The company's estimates of the combined material damage and business interruption components of the insurance claim are in the order of $100 million and are highly sensitive to the period of the disruption."
Atlantic also announced today that its wholly-owned subsidiary Midwest Vanadium had missed a Saturday deadline to pay $5 million plus interest to its senior secured note holders as required under a debt agreement.
However a majority group of the noteholders have committed not to take any action on the unpaid debt until Tuesday, February 25.
Atlantic said it was continuing to negotiate with the noteholders to provide a further period of forbearance and a long term solution to the company's funding needs.
The company has requested its shares remain suspended until it can provide more clarity on its financial situation.
Atlantic shares last changed hands for 17.5 cents.
The fire and missed debt payment is the latest blow in Atlantic's efforts to ramp-up production at the troubled Windimurra plant.
The company has been repeatedly forced to tap its biggest shareholder and creditor, Anthoni Salim's Droxford International, for extra funding over the past year because of cost blowouts and production problems at the plant.
Owing $US335 million to bondholders and tens of millions to Droxford, Atlantic has struggled to make the crushing, milling and beneficiation circuit work, pushing back production deadlines and spending at least $20 million on re-engineering and repairs.
The plant was about 85 per cent complete when Atlantic took control in 2010.
The plant was built by Mineral Resources under a build, own and operate contract with the project's previous owners.
Atlantic has accused MinRes of a breach of contract, which the contractor denies.
