Australis moves into administration Monday Oct 31 19:43 AEST Recently-listed sapphire miner Australis Mining Corp Ltd has appointed an administrator, just beating the corporate regulator which wanted to place the company into liquidation or receivership.
Administrators Robert Elliot and Richard Albarran of Hall Chadwick have been appointed administrators by Australis.
Australis listed in March, raising $6.5 million, and now has total liabilities of $6.3 million, including $4.7 million owed to directors and management.
Since listing, Australis has been attempting to establish its mining plant and site of operations in central Queensland but met with operational difficulties, causing cashflow problems.
It said the Australian Securities and Investment Commission (ASIC) investigation into Australis' financial affairs began in August.
"The investigation by ASIC was seemingly prompted by a few vocal creditors and their appearance, around that time, on a business television program," the company said.
It said one of the creditors on the business program was at the time under investigation for stealing and has since been charged, while the other creditor was a contractor who had made an excessive claim.
After its investigation ASIC sought an order from the Supreme Court to appoint either a provisional liquidator or receiver.
Australis has the backing of its major shareholder Nikiticorp, which put forward a proposal to pay all of Australis' small, unrelated claims within seven days and other unrelated creditors within three months.
A proposal by Australis that if it defaulted on any payments it would be placed into external administration was rejected by ASIC, said Australis.
"The various Australis proposals were rejected by ASIC, having been considered by ASIC staff for only a few hours."
"Australis therefore deplores ASIC's precipitous actions which, if allowed to continue, would be, in the board's view, destructive of the interests of shareholders, employees and creditors of Australis," the company said.
Nikiticorp will continue its financial support under the guidance of a professional administrator.
Australis said it expects to emerge from administration within six months.
Shares in Australis have been suspended from trading since early October, and were last trading at 12 cents.
