MZI falls into administration

McGrathNicol has been appointed administrators to MZI Resources, just over a month after it announced it was $32.25 million in the red for the half-year to December, compared with a $11.34 million loss from the previous corresponding period.

Rob Kirman, Rob Brauer and Jason Preston were appointed voluntary administrators of MZI, which is the owner of the Keysbrook mineral sands mine, located about 70 kilometres south-east of Perth.

The appointment does not apply to the mine, which entered production in 2015, or MZI’s subsidiaries.

In a statement, McGrathNicol said it intended to continue to operate MZI on a ‘business-as-usual’ basis while options for the sale and recapitalisation of the business were explored.

“MZI’s secured lender has indicated it will support allowing the operations of the group to proceed uninterrupted while efforts to conclude a sale and/or recapitalisation process continue,” McGrathNicol said.

In January, MZI announced it decided to explore the sale of its Keysbrook mine, after recurring technical setbacks left the company saddled with high debt.

Major shareholder Resource Capital Funds agreed to lend an extra $US1.5 million ($A2.1 million) to MZI to give the company some breathing space.

RCF recently lifted its stake in MZI to 60.1 per cent after being issued 29 million shares to cover interest payments on its $80 million debt facility during the December quarter.

After trading above 50 cents per share in October 2015, MZI’s share price fell to 13 cents in October last year and has since fallen to just 1.6 cents before it was placed a trading halt on March 19, pending the outcome of discussions with its lenders.

Since the start of the year, managing director Martin Purvis and three non-executive directors have resigned from the company.

John Westdorp was appointed interim managing director in February.