South Crofty Mine has been placed into administration by its owner Western United Mines (WUM).
WUM has taken the move while it seeks alternative investment for the mine, following Celeste Mining Corporations’ failure to fund expenditures in accordance with its contractual obligations
Canada-based Celeste entered into an earn-in agreement with WUM two years ago, but was served with a default notice on June 5.
Despite that notice, no further payments have been received and, to safeguard South Crofty’s assets, the mine’s owners have had to take the preservation step of appointing David Tann, John Kirkpatrick and Keith Stevens of Wilkins Kennedy LLP as administrators.
WUM’s chief executive, Alan Shoesmith, said: “Celeste’s failure to meet its financial responsibilities has been a major blow for us in terms of being able to continue with the exploration and development work that has been yielding such hugely positive results.
“We have faced endless challenges since buying the mine in 2001 – the most recent being UNESCO’s highly publicised objections to mining operations taking place within Cornwall’s World Heritage Site. Each of the battles we have fought has had a considerable impact on our financial resources and on our attractiveness as an investment opportunity but, through it all, we have remained confident and optimistic about the huge potential that South Crofty has to offer.
“That optimism and confidence has not been diminished. We have appointed an administrator to protect the mine whilst we stop to take breath and consolidate our position. A number of employees will be made redundant whilst we move to a care and maintenance basis, however we still have production and economic revival firmly in our sights.
“Our aim is to reform and obtain new finance to replace what we have lost from Celeste and, judging by the interest being shown, we are very hopeful that we can ultimately finish the job started 12 years ago and get the mine back into production.