DISCOVERY METALS ENTERS VOLUNTARY ADMINISTRATION
27 February 2015,
DISCOVERY Metals Limited (ASX:DML) has entered voluntary administration, after its lender group demanded full payment of all debt.
The embattled copper miner's directors regard the company as insolvent, after meeting with the syndicate last week.
The announcement follows DML's Memorandum of Understanding (MOU) with Castlepines Global Equities Limited on February 9.
Castlepines agreed to invest US$110 million into the company's wholly owned subsidiary Discovery Copper, creating a 34 per cent stake in DML's Boseto mine in Botswana.
The company planned to use the money to pay out its US$5 million loan from Cupric Canyon Capital, as well as settle the existing loan facility with the syndicate.
Cupric and the lender have both rejected the MOU, stating that it breaches the respective existing facility agreements.
The lender has also rejected DML's request to complete a rights issue to raise interim funding to pay part or all of the loan owed to Cupric.
The DML board appointed Stefan Dopking and Michael Ryan of FTI Consulting as voluntary administrators of the company.
Shares have been placed in a trading halt until March 3.