Beaconsfield Gold and Bendigo Mining's merger is in doubt after a potential loan default has come to light. In July the companies had agreed to a potential merger which would reduce risks and enhance growth prospects for both companies.
The plan included Bendigo providing a pre-completion loan of $8 million of which it has advanced $5 million already taking a fixed and floating charge over the assets and undertakings of BCD and its subsidiaries. On October 6, 2010 Bendigo, which operates the Henty Gold Mine on the West Coast of Tasmania, received information from BCD that caused it to issue a notice of potential default under the loan agreement.
Bendigo Mining Ltd has said that it may terminate the proposed merger with Beaconsfield Gold if it did not meet the terms of the Scheme Implementation Agreement to fulfil the merger. Despite record gold prices, Beaconsfield recently reported a $1.4 million loss for the 2009-10 financial year. BCD shares have been in a trading halt since October 7, 2010 pending an announcement from the company.