Centennial Mining is bleeding cash and shareholders want the chairman gone
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Centennial Mining made $6m selling gold at $1720 an ounce in the December quarter, but it seems the junior producer still needs its recapitalisation deal.
On top of dwindling cash reserves, the company is also facing a push to have its chairman booted.
Centennial said in its December quarter report that it booked $6m in revenue from the sale of 3500 ounces of gold.
But the company faced issues in accessing necessary funds, which impacted activities at its A1 and Maldon operations.
It managed to restart long hole stoping in the 1360 Area of the A1 mine during the quarter, after a 10-month hiatus.
Stoping involves excavating a series of steps or layers in the ground or rock to gain access to ore in a mine.
The small stope was completed by the middle of the quarter, but Centennial said it meant it incurred higher costs to develop and process the ore from the 1320 and 1300 levels.
“To reduce costs and due to the significant upside demonstrated in the Victory North area, activities at the Union Hill gold mine were reduced during the quarter with available resources reallocated to focus on the Victory North area of the A1 gold mine,” Centennial told investors after market close on Thursday.
In total, Centennial spent just under $7m on exploration, development, production, staff and admin.
The company was left with just $267,000 in cash and $4.1m worth of debt outstanding at the end of the December quarter.
But it expects a cash burn of $6.6m in the current quarter if it can finalise its refinancing arrangements.
Centennial said negotiations are continuing with its major shareholder and lenders to restructure loans and finalise a recapitalisation proposal.
“The delay has resulted in a further deterioration of the company’s financial position where it has become apparent that continuing operations in the present manner is less than optimal,” the company said.
Meanwhile, a rebel shareholder group have served Centennial with a “249D” notice demanding the company call a meeting so shareholders can vote on the removal of chairman Dale Rogers.
Centennial has been suspended from trading since June last year.
Stockhead is seeking comment.