Calidus Resources - Case Update

Billionaire prospector Mark Creasy has succeeded in his bid to gain control of Calidus Resources despite efforts by the company’s directors to progress a rival refinancing proposal.

The West Perth-based gold mining company entered voluntary administration and was placed in receivership by secured creditor Macquarie on 28 June, largely due to issues with the Warrawoona Gold Project’s geological resource model, which was underperforming, and inflation in the mining sector compounded by a hedging position that did not allow the Calidus Group to access the significantly improved gold price from late 2023.

Hayden White and Daniel Woodhouse of FTI Consulting were appointed voluntary administrators, while Richard Tucker and John Bumbak of KordaMentha were appointed receivers.

In their report to creditors in the lead up to the second meeting, the administrators backed a DOCA proposal by West Coast Lending, a company controlled by Mr. Creasy's Yandal Investments. By this point, West Coast Lending had purchased Macquarie’s secured debt and become the senior lender. West Coast Lending has also been funding the maintenance of the Calidus Group during the receivership and administration. The recapitalisation proposal offers a return to priority creditors of 100 cents in the dollar and a return to ordinary unsecured creditors of between 0.3 and 100 cents, depending on which class the creditor falls within and the quantum of claims received.

The administrators advised that they were recommending the West Coast Lending DOCA proposal over a rival $170 million refinancing proposal made by the company’s directors, given their views that the directors’ proposal was not sufficiently progressed to ensure it was capable of completion or that it provided a superior return to creditors.

On 25 September, the administrators provided a further update to creditors, sharing that West Coast Lending had advised that it would immediately instruct the receivers to proceed with implementing a full care and maintenance of the Warrawoona Gold Project, including shutting down all mining activities and processing of the low-grade stockpiles, in the event that the second meeting were adjourned.

As a result, the board withdrew its support of the directors’ proposal and, with no viable alternative, the West Coast Lending DOCA received near unanimous support from employees and suppliers. It is believed that about 70 jobs were saved.

Read the administrators’ most recent report HERE and the notice to creditors regarding the directors’ DOCA proposal HERE.