The struggles of Wiluna Mining Corporation culminated in the company going into insolvency last week.
FTI Consulting was appointed as a voluntary administrator, indicating Wiluna had insufficient working capital to support the reset plan for its Wiluna gold operation in Western Australia.
The move comes after Wiluna recently raised $60 million in emergency funds, which fell at the lower end of the company’s $50–84 million target.
Regular capital raises are in Wiluna’s DNA. When former owner APEX Minerals took on the Wiluna project in 2007, it launched at least eight capital raises in five years before going into receivership in 2013.
Blackham Resources acquired the mine in January 2014 and launched several placements in the years leading up to its 2020 rebrand.
Wiluna Mining Corporation announced a $24.5 million capital raise in December 2020, with similar financial initiatives to follow throughout 2021, including a $53 million share placement in November 2021. The recent $60 million raise would follow.
“The company has unfortunately experienced a combination of adverse factors which have made it necessary to raise additional funds prior to achieving the targeted commercial production run rate for Stage 1,” former Wiluna executive chair Milan Jerkovic said upon launching the recent raise.
“These have included ramp-up delays caused by COVID-19 and skilled labour shortages, inflationary cost pressures, the war in the Ukraine, shipping delays of key equipment and delays to concentrate sales.”
Wiluna had been targeting a run rate of 110–120,000 ounces per annum for its Stage 1 concentrator by the end of 2022.
When appointed as voluntary administrator, FTI said Wiluna had investigated options to address its cash flow shortfall, including obtaining financial accommodation from creditors and shareholders.
However, the company was unable to successfully address the shortfall in the time available.
FTI said it intends to continue operating Wiluna on a ‘business as usual’ basis as it reviews operating and recapitalisation options.