Rio Dorado - Case Update

Shortly before the holidays, Ian Niccol of Aston Chace Group, the liquidator of Sydney-based mining company Rio Dorado, provided an update to creditors on the progress of the liquidation. Mr Niccol was appointed as liquidator on 10 November in the face of a competing voluntary administration and DOCA proposal (which we wrote about HERE). One of the reasons the court decided to wind up the company was that the proposed DOCA was based on a share purchase agreement which the court was doubtful would be completed (the deposit had not been paid and diligence had revealed concerns over the company’s control of its Ecuadorian assets, including significantly a mining concession known as Sabaleta Gold Mine). The share purchase agreement has since lapsed. Since being appointed, the liquidator’s priority has been to secure the company’s interest in the concession and market it for sale. In addition to marketing the concession for sale to third parties, he has liaised with the proposed pre-appointment purchaser to understand the concerns regarding control of the mining concession and what a potential sale may look like. He has also appointed solicitors in Ecuador and a power of attorney over the Ecuadorian subsidiaries to represent the company’s interest in the concession. At the time of the report, the liquidator was hoping that a sale contract would be entered into by Christmas, but warned that this might be affected by a lack of funding.

Read the report here.