The mining group made the decision to enter voluntary administration, seeking a solution to safeguard its operations and maximise value for its stakeholders.
Adaman Resources Group, a prominent mining company based in Western Australia, owned and operated three gold projects and 46 mining tenements dedicated to the exploration, development, and extraction of gold minerals. The group had a workforce of over 100 employees and engaged numerous contractors.
Due to ongoing commercial challenges, including issues related to ore quality, delays in capital investment projects, and the impacts of COVID-19, the group made the decision to enter voluntary administration, seeking a solution to safeguard its operations and maximise value for its stakeholders.
Under the guidance of Cor Cordis, a successful voluntary administration (VA) process was carried out, along with the implementation of a deed of company arrangement (DOCA). As administrators, we managed the operations of the mine and developed a comprehensive financial model to track all expenses. We also initiated a significant capital expenditure (CAPEX) program to ensure the sustainability of the operation, with the support of the primary secured creditor.
Throughout the trading period and the subsequent restructuring and recapitalisation process, Gilbert + Tobin provided valuable assistance to Cor Cordis as legal representatives. Ultimately, the DOCA led to the successful sale of the Adaman Resources Group, with an estimated value exceeding $70 million.
The primary challenge for Cor Cordis was to secure funding to ensure the ongoing trading of the Adaman Resources Group and to safeguard the maximum value for stakeholders. Without sufficient funding, the value of the group’s assets would have significantly diminished and reduced the returns for stakeholders.
To mitigate risks, we focused on the following key challenges:
Led by Jeremy Nipps and Barry Wight, our team at Cor Cordis developed a comprehensive strategy to address the challenges faced by the Adaman Resources Group during the administration period. The key elements of our strategy encompassed:
Through the successful execution of this strategy, we aimed to safeguard the value of the Adaman Resources Group, explore potential opportunities for its future, and ensure the safe and efficient continuation of mining operations during the voluntary administration period.
After extensive analysis of the proposals received, we implemented a combined deed of company arrangement (DOCA) and creditors trust, which allowed the Adaman Resources Group to continue its operations. This outcome not only ensured the preservation of 77 jobs but also delivered a substantial return to all creditors involved.
By restructuring and recapitalising the group, we enabled it to continue making valuable contributions to the local economy of Mount Magnet, as well as the broader gold production industries in Western Australia and Australia as a whole. This outcome was significant in terms of sustaining employment, supporting economic growth within the region, and maintaining the group's role within the mining sector.
The opportunity to manage and deliver a successful outcome for the Adaman Resources Group reinforces Cor Cordis' expertise in large and complex mining and resources matters. This appointment adds to our track record of effectively leading businesses out of financial difficulties, showcasing our capabilities in navigating challenging situations and achieving favourable outcomes for all stakeholders involved.
We would like to extend our thanks and acknowledgement to the following advisors who played a pivotal role in the achievement of this outcome: