PERTH, Australia, Nov. 22, 2013 /CNW/ - Mirabela Nickel Limited (Mirabela or the Company) (ASX: MBN) announced today that the British Columbia Securities
Commission (BCSC) has issued a cease trade order (CTO) against Mirabela, due to the Company not filing by 14 November 2013, its
interim unaudited financial statements for the third quarter ended 30
September 2013 and the associated management discussion and analysis
(collectively, the Default Interim Filings). The CTO will remain in effect until the Default Interim Filings are
filed in Canada and the Executive Director of the BCSC revokes the CTO.
Mirabela previously announced that one of its two customers, Votorantim
Metais Niquel S.A. (Votorantim), had provided notice to Mirabela advising that its concentrate sales
agreement with Mirabela (Sales Agreement) would terminate at the end of November 2013. The Sales Agreement was
expected to run until the end of 2014. The Company took legal advice in
respect of the purported termination of the Sales Agreement by
Votorantim. Following receipt of this advice, discussions were held
with Votorantim and Votorantim confirmed to the Company in writing that
its purported termination of the Sales Agreement was invalid, that the
Sales Agreement remains on foot, that it was committed to a minimum
level of concentrate deliveries for the months of October and November
and that it intends to comply with its obligations under the Sales
Agreement until the end of 2014.
Votorantim has now claimed an event of force majeure under the Sales
Agreement and that as a result, it is not currently obligated to
purchase nickel concentrate from Mirabela pursuant to that agreement.
The Company is taking legal advice on its position regarding a claimed
force majeure and in particular the status of a force majeure when
Votorantim closes its smelter at the end of November 2013 and ceases
trying to remedy the cause of the claimed force majeure.
Mirabela's issues with Votorantim have placed significant stress on the
operations at Mirabela's Santa Rita nickel mine and have the ability to
have a detrimental impact on Mirabela's debt structures. The Company
and its stakeholders are actively discussing potential ways of
restructuring Mirabela's debt to reduce the burden on the Company.
However, any restructuring of Mirabela's debts is complex as the
Company and its advisors are required to deal across legal, financial,
commercial and operational frameworks in three jurisdictions, being
USA, Australia and Brazil. Accordingly, any potential restructuring
transaction will have a high level of execution risk.
Currently, no binding agreements have been concluded nor has any
opportunity or arrangement sufficiently progressed to be announced. No
assurance can be given at this stage that any definitive agreements or
arrangements will be reached with any party that the Company may be in
As a result, despite the execution of the waiver and standstill
agreements as announced on 14 November 2013, Mirabela has significant
uncertainty regarding its future revenue, potential litigation and
whether it will continue as a going concern. As a result, the Company
defaulted on its interim filing obligations as it is currently not able
to, among other things, estimate asset values and prepare financial
statements with confidence that those financial statements will
accurately represent the financial position of the Company and not
contain a misrepresentation.
The CTO orders that trading in securities of Mirabela cease, but further
states that a beneficial shareholder of Mirabela who is not an insider
or control person at the date of the CTO may sell securities of
Mirabela acquired before the order, if the sale is made through a
market outside of Canada, and the sale is made through an investment
dealer registered in British Columbia.
Following the receipt of legal advice and further assessment, the
Company expects to be in a position to remedy the Default Interim
Filings within 30 days.
SOURCE: Mirabela Nickel Ltd.
For further information:
Mirabela Nickel Limited
Telephone: +61 8 9324 1177