Trevali in trading halt amid legal, financial woes

Trevali Mining has undergone a trading halt, two directors have resigned, and the company has confirmed that two managers of the Perkoa mine in Burkina Faso are being detained in relation to a flooding event which led to the deaths of eight workers.

 Trevali Mining, Perkoa mine, Burkina Faso

Trevali Mining, Perkoa mine, Burkina Faso

The news also comes amid financial woes for the company.

While it did not specify the reason for the trading halt, Trevali noted that it follows the receipt of an initial order from Canada's Supreme Court of British Columbia under the Companies' Creditors Arrangement Act.

"The Company expects that as a result of having filed for protection under the CCAA, the Common Shares may be delisted from trading on the TSX and other exchanges in due course," Trevali said.

It said that a comeback hearing in respect of the relief granted pursuant to the initial order has been scheduled for Monday, 29 August.

In tandem with the announcement, Trevali notified the market that Nick Popovic and Aline Cote have resigned from the board of directors of the company.

A flooding event on 16 April at the Perkoa mine, which breached safety controls, resulted in the deaths of the eight workers. Operations at the mine have been suspended ever since.

Trevali confirmed media reports that a manager of the mine, as well as a manger from the company's mining contractor, Byrnecut, are being detained by authorities, pending a trial on charges relating to the flooding event.

Charges have also been filed against Nantou Mining, Trevali's 90% owned subsidiary and operator of Perkoa, it said.

Trevali's share price was last quoted on the Toronto Stock Exchange at C$0.205 (US$0.16). On the day prior to the flooding, the stock closed the session at C$1.89. Trevali has a market capitalisation of C$20.38 million.

Trevali expects that trading of its shares will also be halted on the Lima Stock Exchange, OTCQX, and Frankfurt Stock Exchange.

Trevali had a mandatory prepayment of about US$7.5 million on its revolving credit facility due on 17 August, which the company had previously said it did not expect to be in a position to make.

"The Company's ability to continue as a going concern is dependent upon its ability to generate cash flows from operations and to secure a financing package consisting of debt financing, equity financing and/or the sale of all or part of the business and assets of Trevali," the company said 15 August.

As of 30 June, Trevali had $41.7 million in cash. The company's total liabilities exceeded its assets by $41.4 million.   

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