The business rescue practitioners (BRPs) of Mineral Sands Resources (MSR) are seeking funding solutions following an urgent claim from the Tormin mine’s post commencement funding (PCF) provider.

Operations at the mine, in the Western Cape, will therefore be temporarily suspended. An action plan has been put in place to ensure the continued health and safety at the operation during the suspension, until such time as an alternative funder has been sourced.

The Department of Mineral Resources and Energy has been informed and MSR has initiated consultations with employees and the National Union of Mineworkers regarding temporary layoffs owing to the funding shortfall.

MSR was placed under business rescue on August 6 after a resolution by the directors. In addition to the PCF, the sale of stockpiled products generated additional cash flow, enabling the resumption of operations from September to November.

On November 26, the BRPs received a letter from the PCF provider demanding full repayment of the PCF in the amount of R16-million plus interest, within seven days of the letter’s issuance.

A meeting was held between the BRPs and the provider’s legal representatives, requesting that the PCF be extended until end January 2025, while a sale of MSR – which would repay the outstanding PCF – is finalised.

In the absence of an extension of the existing funding, consent was requested to make two critical payments that would allow for further inflows to the company and repayment of the PCF.

These requests were denied and the BRPs have taken legal steps to protect the company.

“Work is under way to secure the funding MSR needs to resume operations and protect the jobs and wider community benefits that this key regional asset has created. We are exploring all avenues, including a possible sale of the mine.

“Our immediate priority is to negotiate with creditors to preserve the asset's value, retain operational continuity and get MSR's . . . people back to work as quickly as possible,” Engaged Business Turnaround senior BRP Warren Castle said on December 2.

Australian company Mineral Commodities holds a 50% interest in MSR.