Beaconsfield gold mine has managed to avert being sent into administration as its main money lender Minemakers threatened to revoke its $8.5 million loan. Minemakers was unhappy with the debt levels of the Tasmanian mine and wanted restructuring.
The owners of Beaconsfield gold mine, BCD Resources along with a consortium of shareholders and contractors have managed to raise $6 million in cash to avoid this from happening. They will receive shares in the company in return.
Minemakers shall also get shares in return for its $8.5 million loan. This would give it 45 % stake in BCD Resources. They expect the mine to start making money by early 2011 to alleviate the situation. The loan was provided after a merger with Bendigo Mining did not materialize as planned.
Bill Colvin the Chief Executive Officer of BCD Resources said that the latest arrangement would end two months of financial instability after the failed merger. He also said that it was a very difficult time for the company, all the workers at the mine and the community in Beaconsfield.
The current deal has saved the jobs of about 200 mine workers and contractors in the mine. Workforce may still be reduced to make the mine profitable again. It is currently making a loss despite the rising gold prices.