Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.
The mine’s operator, Termite Resources, has been placed in administration, IMX Resources, which holds a 51% stake in the company, announced on Thursday June 19.
IMX has appointed Ferrier Hodgson’s Martin Lewis as administrator. He is expected to provide an initial assessment of Cairn Hill’s financial position as soon as possible, it said.
All contractual liabilities for the Cairn Hill mine are Termite Resources’ obligation, except for a guarantee provided by IMX under a port-handling services contract with Flinders Ports that is capped at A$3 million ($2.8 million), according to IMX.
IMX noted that this development has no impact on its ongoing exploration at its Ntaka Hill nickel sulphide project or its Kishugu gold prospect in south-east Tanzania. Neither will it affect its efforts to secure a partner for its Mt Woods magnetite project in South Australia, it said.
Sharp drops in iron ore prices are giving many emerging high-cost mining companies a hard time.
Metal Bulletin’s 62% Fe Iron Ore Index was at $91.28 per tonne cfr China on Wednesday June 18, down 32.8% from an average of $135.90 per tonne cfr in 2013.
The Cairn Hill mine has production capacity of 1.8 million tpy of coarse-grained magnetite-copper-gold direct shipping ore product.
The Cairn Hill iron ore project in South Australia has fallen victim to iron ore price drops, becoming one of the very first to drop out of the game.