Article by Adrian Rauso and Matt Mckenzie, courtesy of The West Australian.
24.02.2025
Almost $150 million of Federal Government funds are tied up with a local mineral sands miner that is now insolvent.
Strandline Resources has fallen into administration after long-running talks to bring in fresh cash failed.
The shares of ASX-listed Strandline, which counts the Coburn heavy mineral sands project near Shark Bay as its key asset, have been in suspension for more than a year as the business battled to stave off collapse.
Thomas Birch and Jeremy Nipps of Cor Cordis were appointed as administrators on Friday. McGrathNicol’s Rob Brauer, Linda Smith and Jason Preston were then picked by secured creditors to act as receivers.
The receivers intend to continue operating Strandline on a “business as usual” basis while a sale or recapitalisation is considered. No imminent job losses are planned, The West Australian understands.
A statement to the ASX on Monday morning said Strandline had been working to improve operating performance at the mineral sands mine while trying to restructure debts.
The company ran out of cash to keep it afloat before a restructure could be finalised, however.
The West Australian revealed in January that the Federal Government’s Northern Australia Infrastructure Facility would likely take a haircut on its debts as Strandline’s single biggest financier.
NAIF, which was initially set up to fund public infrastructure, had loaned the failed miner about $140m and touted Coburn as ”game-changing”.
NAIF started pouring money into Strandline during 2020 and kept the funding tap flowing as recently as December when $5m was parachuted in to help build an airstrip near Coburn. Strandline had sought to reduce its ongoing transport costs by using the airstrip.
A NAIF spokesman declined to reveal if the government entity would be amenable to taking a haircut on its debts and why more funding was provided during the tail end of last year when Strandline’s dire financial situation was already well known.
“As a financier to the project, and given the project is now in administration, it would not be appropriate for NAIF to comment on the company’s plans around financing other than to refer to what the company has already publicly announced,” the spokesman said.
A spokesman for Federal Northern Australia Minister Madeleine King said NAIF is a government facility that operates in “a high-risk environment”.
“The NAIF undertakes extensive due diligence prior to every investment decision and monitors loan performance to ensure any loan provided is repaid in full and on time,” he said.
“NAIF’s management of its loans is a matter for the NAIF Board.”
Strandline offloaded its Tanzanian mineral sands assets in August for about $43m to help pay down its debts.
The company had just $1.33m of cash left by the end of the December quarter with $251.5m worth of loans it had yet to pay back.
Strandline shipped first product from the $260m project in 2022 and has struggled to keep its head above water since.
The heavy mineral concentrate from the wet concentrator at Coburn is processed further to produce the final products of chloride ilmenite, rutile, premium zircon and zircon concentrate.
