Administrators of EVM Nickel have succeeded in securing a four-month extension to potentially start a sales campaign for the company’s mining assets.
Cor Cordis administrators Thomas Birch and Jeremy Nipps were appointed to EVM Nickel Pty Ltd last month by secured creditor Johnson Matthey, a UK-based chemicals firm.
EVM Nickel’s main assets are mining tenements located 85 kilometres west-south-west of Meekatharra.
The company is owned by EV Metals Group, a company that plans to develop a chemicals plant in Saudi Arabia to process Western Australian battery metals.
In a judgment published today, the Supreme Court of Western Australia granted an extension of time until July 2024, finding it would be in the best interests of the company’s creditors.
WA Supreme Court Justice Alain Musikanth said the usual time given under relevant legislation was insufficient for the administrators to produce a report for creditors.
Justice Musikanth said EVM Nickel would obtain the best price for its assets if a proper sales campaign was conducted through a specialist advisory firm that was experienced in valuing mining interests.
“Consequently, unless an extension was granted, in circumstances where the administrators had yet to form a view as to the prospect of a restructure or sale of its business assets, and where no proposed DOCA [deed of company arrangement] had in any event been received, it appeared likely that creditors would be left with no option but to wind up the company,” he said in his judgment.
“In short, I was satisfied on all the evidence not only that such an extension would be in the best interests of the creditors of the company as a whole, but also that the potential benefit of such an extension to creditors would outweigh any prejudice to them.
“In Mr Birch’s view a sales campaign was likely to be completed within four months. In this regard, the proposed timetable for such a campaign would commence in March 2024.”
In his judgment, Justice Musikanth said if the second meeting of creditors was held before the sales campaign and EVM Nickel ended up collapsing, the company’s creditors would likely receive a lower return.
Justice Musikanth said the administrators had done an urgent assessment of EVM Nickel’s financial position and affairs.
“Their preliminary findings included that the company was not presently trading and that its assets were limited to mining tenement interests and other proprietary mining rights which arose under a number of written agreements with its key contractual counterparty,” the judgment reads.
“However, despite its current external administration status, the tenements in the company’s own name were in good standing and were not currently liable to being revoked, cancelled or forfeited.”
Business News previously reported that the appointment of voluntary administrators by Johnson Matthey only applies to EVM Nickel and does not extend to any other companies within EV Metals Group.
EVM Nickel’s administration comes months after another EV Metals Group-related entity was hit with a wind-up application.
Perth Airport-based SGS Australia lodged the application against Australian Lithium Alliance, a lithium development subsidiary of EV Metals Group, in December.
