Loading ...Allied Nevada Gold Corp. is seeking financing to boost liquidity after the miner’s cash declined almost 45 percent in less than a month, according to two people with knowledge of the matter.
The company is asking potential providers of a rescue loan to examine its financial records as its cash balance dwindles to about $9.5 million and it’s used almost all of its revolving credit line, said the people, who asked not to be identified because the information isn’t public. The company projects it will have just over $6 million of cash at the end of the week, down from about $17 million to start February, said one of the people.
Allied Nevada’s liquidity position has worsened as its liability on a U.S.-Canadian dollar currency swap grows and it spends cash to build its Hycroft gold and silver mine in Nevada. The swap was issued in connection with a bond financing and requires the miner to post collateral to some counterparties as the Canadian dollar depreciates against the greenback. The company hired financial adviser Moelis & Co. to help it negotiate with lenders who are owed $543 million.
The gold and silver miner has just $50,000 available to borrow on its $75 million revolver due April 2016, one of the people said. It has drawn $56.5 million on the loan and written almost $18.5 million in letters of credit against it.
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