The shares of Discovery Metals Limited (DML) have been placed under trading halt in the ASX as the company is in frantic efforts to seal a deal involving the sale of its Boseto mine near Maun. The Australian and Botswana Stock Exchange (BSE) listed company earlier in the week announced its disappointment after failing to reach an agreement with Barclays Capital backed private equity firm, Cupric Canyon Capital LP.
ASX Senior Adviser-Listings Compliance, Shannon Hong confirmed in a letter that the ‘securities’ of DML will be placed in trading halt session state at the request of the company, pending the release of an announcement by the company.
“Unless ASX decides otherwise, the securities will remain in trading halt session state until commencement of normal trading on Monday, 9 February 2015, or when the announcement is released to the market,” Hong said.
DML had requested an immediate trading halt pending the release of further information relating to a potential transaction involving its Boseto Copper Operation in Botswana. Discovery Metals requested the trading halt to continue until the earlier of commencement of normal trading on Monday 9 February 2015 and / or when the company makes an announcement to the market and requests that the halt be lifted.
Late last year, DML announced it has entered into Exclusivity Period with Cupric over a potential sale of the mine. However, the exclusivity period was lifted after DML and Cupric failed to agree on the terms of a binding terms sheet Agreement by 31 January 2015. The troubled Australian company has been having a tough time with lenders. As part of the talks with Cupric, DML acquired a US$5 million short term working capital facility that it now needs to pay in full before 31 March 2015.
“At the date of this announcement, the Company is of the view that it will shortly receive a terms sheet offer from alternative sources, which will allow for settlement of all existing debt facilities, and provide the required capital to allow DML to expedite the progression of the Zeta underground development,” said the DML statement.
The company plans to put Boseto under care and maintenance by 30 June 2015, on the back of mounting costsÔÇöa move that has angered its employees. DML has already retrenched 85 employees based at the Boseto operation out of a total staff complement of 516.