Hundreds of jobs at the Windimurra vanadium mine development in the mid-west of Western Australia A's are to go after the appointment of administrators and receivers.
The mine was set to start producing ferrovanadium this year but announced at the end of last year that it needed an extra A$81 million for construction labour and fixed costs.
``There's over 400 contractors on site, they're being wound down and demobilised from the site because construction needs to be put on hold while this assessment occurs,'' administrator Darren Weaver of Ferrier Hodgson said today.
``Ultimately the decision is in the hands of the receivers.''
Korda Mentha receiver Brian McMaster said the mine would be placed on effective care and maintenance while contractors were redeployed.
The future of the company's 50 workers was still uncertain.
"We're just working through with them at the moment what the best course of action is and we've sort of agreed that ... we'll have a result by next week,'' Mr McMaster said. ``Sixty contractors left yesterday, we're thinking about 130 will come off today and then after that we're down to a core of people who are more or less required to keep everything on care and maintenance. We'll work through over the next couple of days whether any more of those need to come out or not.''
The company announced in its December quarter activities report that it had $71 million in cash at the end of 2008 but was taking steps to conserve cash.
However, its financial report for the same quarter stated cash reserves at quarter's end totalled $114 million.
Mr Weaver said all options are still open and the mine may still be viable.
``We're working pretty closely with the receivers to make sure that we can preserve all the recapitalisation options as one of the potential outcomes,'' Mr Weaver said.
``Given that the project is 90 per cent complete ... and given there is a defined amount of monies that need to be reinvested in order to complete it ... there is an ability where a (recapitalisation) might work in this situation.
``The secured creditors are going to be very focused on their returns ... but there's also a lot of interest in the project.
``At this stage I think that all the options are open.''
Source: Perth Now
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