Rodeo Creek Gold, Affiliates Seek Bankruptcy Protection
Rodeo Creek Gold Inc. and three affiliates, part of an international mining company engaged in the exploration, development and operation of high-quality gold properties, sought bankruptcy protection to facilitate a sale of certain assets.
The company listed assets of $50 million to $100 million and debt of $100 million to $500 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Reno, Nevada, where it is based. Affiliates Antler Peak Gold Inc., Hollister Venture Corp. and Touchstone Resources Co. also sought protection.
The filing became necessary after the companies failed to secure financing, outside of bankruptcy, to fund operations through the conclusion of a sale process, Chief Executive Officer Raymond Dombrowski Jr. said in court papers.
In late December, the company began a pre-marketing process for the sale of the “Nevada operations.” Although multiple bids were received, none were “sufficient to warrant a stalking-horse designation,” Dombrowski said.
The Nevada operations consist of a total of about 950 unpatented federal mining claims, covering more than 42 square miles in the Carlin Trend gold belt, and the Esmeralda Mill located in Mineral County, according to court papers.
“Concurrently with the foregoing sale process, the debtors attempted to resolve myriad ongoing and additional liquidity issues,” Dombrowski said. “Although many of the debtors’ efforts were successful, the efforts were ultimately insufficient to overcome severe gold production shortfalls” which required “substantial additional funding,” Dombrowski added.
The 20 largest consolidated creditors without collateral backing their claims are owed about $13.4 million, according to court documents. The State of Nevada is the biggest with a claim of $2.7 million for taxes. The three largest trade creditors are Quality Transportation Inc., with a claim of $2.2 million; San Juan Drilling Inc., with a claim of $1.5 million; and Sandvik Mining & Construction USA LLC, with a claim of $1.3 million, court papers show.
British Columbia-based Great Basin Gold Ltd. is the ultimate parent of Rodeo Creek and its affiliates. Great Basin wasn’t included in the bankruptcy filing.
The case is In re Rodeo Creek Gold Inc., 13-50301, U.S. Bankruptcy Court, District of Nevada (Reno).
To contact the reporter on this story: Dawn McCarty in Wilmington, Delaware, at email@example.com