Elmore (ASX:ELE) - Case Update

Martin Jones, Matthew Woods and Clint Joseph of KPMG have provided an update on their administration of Elmore (ASX:ELE), which operates the Peko mine in Tennant Creek in the Northern Territory.

The company, along with eight of its subsidiaries, entered voluntary administration on 6 February. Subsequently, on 16 February, Richard Tucker and John Bumbak of KordaMentha were appointed as receivers and took control of the business.

The directors attribute the company’s failure to undercapitalisation, with the administrators adding insufficient revenue generated from the sale of iron-ore, underperformance of targeted production of iron-ore and inadequate cash resources as additional reasons for the company’s failure.

A sales process for the business was launched by the receivers and is still ongoing. Several parties have expressed interest in proposing a DOCA, including Avior Asset Management and the company’s directors, and the administrators have recommended adjourning the second meeting of creditors to allow time for interested parties to formula and submit their DOCA proposal.