Sumatra Copper and Gold (ASX: SUM) has called in the administrators and directors Gavin Caudle and David Fowler have quit.

This morning’s news came after the company has so far failed to reach an agreement with lenders despite months of negotiation.

In late February 2016 it had produced 2,750 tonnes of gold the previous month and shares reached 7.2 cents. However it also took on another US$5 million in debt that month with a total of US$45 million.

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Trouble began in July 2016 when it endured a “geotechnical event” (a void) that posed a threat to infrastructure and even when completed, resulted in lower ore production. While it did complete capital raisings, these were only used to repay debt and even then were not enough.

Operations were suspended at the Tembang gold project temporarily in May 2018. The hope was that connecting the project to a state-owned electricity grid would result in reduction in power charges.

But it continued to drill at Belinau and it resulted in unsustainable cash bleeding, leading to that project to be suspended in August. This came three weeks after the company’s shares were suspended.

Since then Sumatra has continued to negotiate with its lenders but to no avail. The company told shareholders it had “no realistic alternative” but to appoint administrators.

The company promised it would try to find a way to resurrect itself although there was no clarification as to whether it would be with its current projects or new ones.

The stock had fallen 83 per cent between February 2016 and its suspension to 1.2 cents.


In other ASX base metals news today:

Cassini Resources (ASX: CZI) has earned-in 70% of the nickel and copper West Musgrave Project. It has contributed $36 million towards the project’s pre-feasibility study and exploration to date. Its partner, Oz Minerals (ASX: OZL), has now rewarded them accordingly – 14 months earlier than the deal required. The pre-feasibility study is due for release early next quarter.

Canyon Resources (ASX: CAY) has announced survey results from its bauxite project in Cameroon and reported 70 target plateaux. The new area, at 65 square kilometres, is nearly double the current area, at 36 square kilometres and will be drilled in the future.

This announcement comes a month after Canyon announced a high grade resource of 250.9 million tonnes with 50.8% bauxite. It is also five months after rich-lister Tolga Kumova joined the company. Shares only climbed half a cent at market open to 20 cents, although they have doubled since July last year.

Aus Tin Mining (ASX: ANW) has announced it has raised $450,000 in a placement and intends to raise $750,000 in a rights issue in due course. However it is still well short of the $3 million it admitted it will need for the project in coming months.

The company’s Taronga Tin project is in northern New South Wales and is estimated to be one of the largest undeveloped hard-rock tin projects globally. CEO Peter Williams talked up tin’s,’ potential role in the energy revolution‘, in this morning’s announcement to shareholders.