Each one in plain English, with the numbers worked through for a shareholder.
19 Dec 2022bankruptcy or receivership▼ BadMajor
The end. The court terminated the CCAA proceedings and Great Panther made a voluntary assignment into bankruptcy on 16 December, with Alvarez & Marsal appointed trustee and now exercising the company's rights as shareholder of its subsidiaries; directors Alan Hair, Joseph Gallucci, Trudy Curran and John Jennings resigned beforehand. Mina Tucano stays in Brazilian judicial reorganisation and funding to the Peruvian companies has stopped. Three years and nine months after the Beadell deal made Tucano the cornerstone, the parent no longer exists as a going concern.
25 Nov 2022material agreement termination▼ BadMajor
Terminated the share purchase agreement with Newrange for the Peruvian subsidiaries; the conditions, including TSX Venture approval and evidence that Newrange could fund it, were never met. Coricancha, in care and maintenance for the whole five years Great Panther owned it, could not be sold even for US$750,000.
The BC Securities Commission issued a failure-to-file cease trade order dated 18 November after the company missed the 14 November deadline for its third-quarter accounts, and the company told the regulator and the monitor it would not be able to continue public disclosure at all. From here the record moves to the monitor's court filings rather than to shareholders.
The court approved a sales and investment solicitation process covering Great Panther and most of its assets including Mina Tucano, with RBC Capital Markets as sale adviser and a roughly twelve-week two-phase marketing period. This is the point at which the restructuring became an auction of the company rather than a plan to keep it.
The Supreme Court of British Columbia converted the proceedings from the Bankruptcy and Insolvency Act to the more flexible CCAA on 4 October, with a stay only to 14 October and Alvarez & Marsal as monitor. The court also approved an agreement keeping refiner Asahi in place so Tucano's gold can still be sold - a company now managing week to week.
The TSX confirmed delisting effective 27 October, completing the loss of both listings within six weeks of the insolvency filing. The release notes that shareholders retain their legal rights and equity interest and points them to over-the-counter trading.
Signed a non-binding letter of intent to sell both Peruvian subsidiaries, and with them the Coricancha mine, to Newrange Gold for US$750,000 in cash - subject to the proposal trustee and the court. Great Panther paid US$0.1 million plus an earn-out for Coricancha in 2017 and spent five years and a US$25 million restart plan on it without ever reopening the mine.
NYSE American determined to delist the shares because of the insolvency filing and halted trading from 13 September; the company chose not to appeal, and a Form 25 would follow. Whatever market remains is OTC Pink, which the company itself warns may offer far less liquidity.
The insolvency spread to the asset itself: Brazilian subsidiary Mina Tucano and its two Beadell holding companies filed for judicial reorganisation in Rio de Janeiro, and the TSX suspended trading in the shares and opened an expedited delisting review. Tucano keeps operating under court supervision, but the parent no longer controls its cash.
Filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act, giving an immediate 30-day stay against creditors. The board states plainly that the company is likely to default on several material debtor agreements for lack of liquidity, blaming the previously disclosed operational problems, cost inflation, unplanned capital spending and contractor mobilisation delays, and authorises management to convert into CCAA proceedings if that suits better. Four weeks after selling Mexico, the money from that sale was not enough.
Sold the whole Mexican business - the Guanajuato Mine Complex, Topia, El Horcon and Santa Rosa, held through Minera Mexicana El Rosario - to Guanajuato Silver for US$8.0 million cash plus about US$1.35 million of working capital adjustment, 25,787,200 GSilver shares worth about US$8.9 million at closing, and up to US$2.0 million of contingent payments tied to 2.5 million ounces of production and to silver reaching US$27.50 and US$30.00. About US$3.45 million of the proceeds went straight to repaying the Samsung lead concentrate prepayment. The company that began as a Mexican silver miner has sold every Mexican asset it ever had.
Completed the one-for-ten consolidation, leaving 47,137,066 shares outstanding. It fixed the quoted price and nothing else; the company would file for creditor protection seven weeks later.
12 July 2022security holder rights change▼ BadMajor
Announced a one-for-ten share consolidation to cure the NYSE American price deficiency, cutting 471,164,174 shares to about 47,116,417 with matching adjustments to options and share units, effective 21 July and trading on the new basis from 25 July.
NYSE American notified the company it had breached the continued listing standard for a low share price, its 30-day average having fallen below US$0.20, and required sustained improvement above that level by 6 December 2022 or a reverse split. The TSX listing was unaffected, and shareholders were to vote at the June AGM on giving the board discretion to consolidate.
Filed the Tucano technical report supporting the April 2022 reserve and resource statement, effective 31 July 2021 - the last technical document the company would file before insolvency proceedings began in September.
The Tucano technical report itself, effective 31 July 2021. It shows the shape of the problem: open-pit reserves of about 9.2 million tonnes at only 1.16 g/t gold against underground reserves of 2.16 million tonnes at 4.13 g/t, so the mill's bulk feed is low grade and the high grade sits in an underground project not yet built.
Completed the Urucum North resource conversion program - 48 holes for 18,948 metres - with the later holes returning 3.9 metres at 7.65 g/t gold in 21URNDD049 and 3.7 metres at 6.20 g/t at 432 metres depth in 21URNDD053, all true widths. Chair Alan Hair is now interim chief executive, the third leadership change since the Beadell deal, and the case for underground mining alongside the open pits rests on narrow high-grade lodes like these.
Twenty-two holes for 5,219 metres at Coricancha in Peru, which has still never restarted since the 2018 economic study. Grades are high but the veins are very thin: 0.4 metres true width at 9.8 g/t gold, 910 g/t silver, 7.2% zinc, 2.2% copper and 5.6% lead in ES-DDH01-21, and 0.8 metres at 9.7 g/t gold and 323 g/t silver in ES-DDH04-21, mostly on the newly found Escondida vein.
Filed the Guanajuato Mine Complex technical report supporting the 11 February 2022 resource announcement, effective 31 July 2021. It is the last resource document the company would file for its Mexican mines before selling them.
The Topia technical report itself, effective 31 March 2021 and signed by Robert Brown as an outside consultant with resource geologist Mohammad Nourpour.
Both Mexican mines shrank. Topia's measured and indicated resource fell 25% to 11.1 million silver-equivalent ounces against the 2018 estimate, even though grade rose 8% to 1,041 g/t silver-equivalent, and the Guanajuato Mine Complex fell 36% to 7.7 million ounces against the 2020 estimate at a grade 2% higher. Higher grade on far fewer ounces means the reporting cut-off moved, not that the mines improved.
Chair David Garofalo resigned with immediate effect and Alan Hair, a director since April 2020 and a former Hudbay chief executive, took the chair. Hair would be interim chief executive within six months.
The quarter the operating story broke. Tucano's cash cost jumped to US$1,801 per gold ounce sold from US$712 a year earlier and all-in sustaining cost to US$2,247 from US$1,023, on lower grades from blending stockpiled ore, poorer recoveries and the end of capitalising Urucum stripping. With an average realised gold price of US$1,780 an ounce, cash cost alone exceeded revenue per ounce; mine operating earnings fell US$39.0 million year on year and the quarterly net loss was US$18.0 million.
UCS did not come back. The geotechnical committee required more remediation, ore mining was suspended again, and a fresh pushback of the west wall was started, estimated at six to eight weeks with vertical drains not in place until late November. This is why the mill was fed low-grade stockpiles in the third quarter, and why cash costs went to US$1,801 an ounce.
Second-phase TAP C results, wider but lower grade than the first: 38 metres at 2.5 g/t gold from 167 metres and 24.6 metres at 1.6 g/t in hole 21TACDD029, 9 metres at 7.8 g/t in 21TACDD030, all intercept widths and now reported at a 0.3 g/t cut-off rather than April's 0.4 g/t. Management intends to bring TAP C back into production in 2022 to give the mill extra feed close to the plant, and regional work has picked up a gold trend within 20 kilometres.
Drilling at Urucum North traced the high-grade zone about 500 metres down plunge and still open - 2.2 metres at 14.3 g/t gold in 21URNDD005, 2.6 metres at 9.3 g/t in 21URNDD015 - and found shallow high grades such as 4.7 metres at 8.0 g/t in 21URNDD017. The intercepts are narrow, and the company is weighing whether to reach them by extending the open pit or by the planned 40,000 to 50,000 ounce-a-year underground mine.
The first crack at Tucano. Rainfall well above average raised water levels in the west wall of the Urucum Central South pit, movement was detected, and mining there was halted; the mill has to run on Urucum North ore and stockpiles instead. 2021 guidance is cut by 10,000 ounces to 125,000-140,000 gold-equivalent ounces, with UCS mining expected to resume in the third quarter.
First-phase drilling at Tucano's TAP C pit, mined out to the base of the oxide zone by the previous owner, shows mineralisation continuing 50 to 70 metres below the pit floor - 17.7 g/t gold over 1.75 metres in 21TACDD001 and 6.3 g/t over 3.9 metres in 21TACDD002 (intercept widths). A re-modelling of TAP C1 gives the company a structural framework explaining the discontinuities, and management expects TAP C to enter the next Tucano resource statement.
