Polymetallic producer and explorer Bass Metals (ASX: BSM) has been granted a temporary suspension by the ASX pending 'completion of a financing transaction to support the updated operating plans for the Hellyer mine project.'
Bass has indicated the temporary suspension of the company’s securities is anticipated to be for three to four weeks, with the company in advanced discussions with several parties with the objective of raising around $25 million, largely through a convertible debt structure.
Commensurate with this the operations team is updating the HMP mine plan to generate a robust high-grade mine plan to be incorporated in its cash flow forecasts, which is also being scrutinised by independent technical consultants.
Mike Rosenstreich, managing director, earlier in the week said when the company requested a trading halt, “The company needs to recapitalise to be able to reposition itself from the unforeseen technical issues only recently encountered revolving around water inflows and ore grades.
"The newly updated operating plan appears robust and it is anticipated to provide a strong platform from which to aggressively develop our existing assets and to rebuild shareholder value eroded over the past few months.”
The funds raised, subject to successful completion of the refinancing, are planned to be deployed toward:
- Upgrading mine services such as dewatering infrastructure and funding production delays and shortfalls incurred through the June 2011 quarter (around $8 million);
- Exploration work to evaluate existing resources and generate new targets as well as completion of the Gold Recovery Feasibility study (around $6.5 million); and
- Provide a minimum cash buffer of approximately 2 months working capital (around $9 million).