Altura Mining Limited 

AJM Now a Subsidiary of PLS: Altura Mining Limited (ASX: AJM) is engaged in the production and exploration of lithium. It operates Altura Lithium project in Western Australia’s Pilbara region. The company started commercial production on the project in March 2019. On 21^st January 2021, the company updated the investors regarding the closure of Deed Administration and effectuation of terms under the Deed of Company Arrangement (DOCA) executed with Pilbara Minerals Limited (ASX: PLS) on 11^th December 2020. As on date, Altura Lithium Operations Pty Limited (ALO), previously a wholly owned subsidiary (WOS) of AJM is now a WOS of PLS.

DOCA & Acquisition by PLS: On 20^th January 2021, PLS announced regarding the acquisition of Altura Lithium Project by acquiring all the shares in ALO, the operator Altura Project. The acquisition was subject to a Share Sale Agreement (SSA) PLS entered with AJM and Richard Tucker and John Bumbak, the appointed joint and several receivers and managers of Altura to acquire shares in ALO for US$175 million. The SSA was also subject to execution of a Deed of Company Arrangement (DOCA) proposal (for PLS contributing $6 million now to a DOCA fund for Altura employees’ entitlements) to be approved by ALO creditors and equity raising of $240 million by PLS for completing the acquisition of AJM. The approval by ALO creditors and implementation of PLS’ funded DOCA dated 11 December 2020 were key pre-requisites to the proposed acquisition of the Altura project for US$175 million. As part of the consideration for Altura project, PLS has paid upfront cash sum of US$155 million and a deferred sum is payable up to 12 months after completion, for the issue of approx. 69 million shares of PLS at a deemed issue price of $0.4072 as per the SSA.

Ongoing Voluntary Administration: From 20 January 2021, AJM and ALO are no longer subjected to the appointment of Receivers and Managers. The company is still subject to voluntary administration. As announced previously, Clifford Stuart Rocke and Jeremy Joseph Nipps of Cor Cordis are the joint and several voluntary administrators appointed for AJM and ALO.

Operations Update: On 24^th September 2020, the company announced that it is maintaining commercial level of production and expect Q1FY21 (ending September 2020) production in the range of 43k-45k wet metric tonnes (wmt) in sync with previous quarters. The company has sold 4 shipments for 51k wmt approx. more than quarterly production to long-term offtake partners. The company informed that it is in talks with senior lenders to restructure its debt structure and update in case of any significant development. Q4FY20 was the company’s 5^th consecutive quarter of commercial production. The company achieved the highest sales and shipment of 60,950 wmt lithium carbonate for the June 2020 quarter. It reported production of 46k wmt of lithium concentrate, higher than 42k wmt in March quarter. With this, AJM’s FY20 production stands at 181k wmt, 82% of its nameplate capacity. During the quarter, AJM inked a 5-year binding offtake contract with Hunan Yongshan Lithium Co. Limited. AJM received cash receipts of $31,329 from the customers during June 2020 quarter.

Quarterly Production Highlights, Sept19-June20 (Source: Company Reports)

Outlook: Going further, the claims of creditors of ALO will be settled by Altura Operations Creditors’ Trust (created). The company is still under voluntary administration and the administrators will soon start a process for restructuring/recapitalisation/sale of AJM and its remaining assets. As per the administrators, currently, there does not seem to be a possibility of return to AJM’s shareholders. The administrators will convene another meeting with creditors to determine the future course by 24 February 2021 unless delayed by the court or by themselves to seek more time.

Stock Details: On 10 August 2020, the securities of AJM were placed in a trading halt pending the release of an announcement to the market containing an update regarding its current arrangements with its lenders. Later on 12 August 2020, the securities were suspended from the quotation in order to discuss and complete changes to its existing financing arrangements with its lenders. Henceforth, the stock is in suspension and was last traded at the market price of $0.070.

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