After the loss of the company's equity, announced in January 2015, and after several months during which the Board of Director of NunaMinerals has continued to seek for a solutions capable to provide the necessary funding for NunaMinerals to continue its operations, the Board has announced yesterday that the company is therefore to be insolvent, and that there are no other solution than filing for bankruptcy to the Court of Greenland as soon as possible.
NunaMinerals is the Greenlandic leading company for mineral exploration (mainly gold, but also diamonds and other rare materials). , "The objective of NunaMinerals is to develop and utilize Greenland's natural mineral resources on a commercial basis. The success criterion of the Company is to create value for its shareholders. NunaMinerals' exploration is aimed at developing projects with a view to building a profitable business with income from co-ownerships of mines, royalties from mining operations and sales of projects. The Company's work has in the recent years resulted in, amongst other things, the discovery, development and start-up of Greenland's first gold mine (the Nalunaq Gold Mine), which now have been sold. With its key employees and knowledge databases, NunaMinerals possesses extensive expertise in exploration and in-depth knowledge of Greenland's geological history and exploration, relevant exploration methods, and logistic conditions in Greenland.
In practice, the NunaMinerals exploration process is a series of progressive phases in which advancement from one phase to the next is conditional on continued verification of a positive assessment of the commercial potential of the mineralization after deduction of likely exploration costs." (nunaminerals.com)
Reaction to the news from the Greenlandic government are expected later today.
The press release by NunaMinerals states:
With reference to company announcements no. 5 of 30 January 2015, no. 7 of 2 February 2015, no. 8 of 20 February 2015 and no. 9 of 31 March 2015, the Board of Directors deeply regrets to inform that is has not been possible to find a solution which could provide the necessary funding for NunaMinerals to continue its operations.
Since the loss of the company's equity, as reported on 19 January 2015, and the extraordinary general meeting of 29 January 2015, the Board of Directors and the Executive Management have continued their efforts to seek alternative financing. Every avenue has been followed that potentially could lead to a solution for the benefit of all shareholders. Unfortunately it has not been possible to find a solution for NunaMinerals within the limited time period available to the Company.
A Letter Proposal ("the Offer") with further amendments was received during March and April from Greenland Mining Management Ltd ("GMM").
The Government of Greenland, as the largest shareholder in NunaMinerals, did not see the proposal as a sufficiently viable plan for a refinancing of NunaMinerals and did not find the proposal acceptable under the terms offered.
NunaMinerals is not able to meet its payment obligations as they fall due and the company is therefore deemed to be insolvent.
Against this background and in order to comply with its regulatory obligations, the Board of Directors sees no other alternative than to file for bankruptcy at the Court of Greenland and will file such petition for bankruptcy as soon as possible.
Download NunaMinerals Press Release here.