Cleveland borrowed funds from Platinum Partner in the USA, who got raided by the FBI for defrauding a pension fund. That's how they financed the mine expansion.
The liquidators of Platinum wanted millions back from CDG but they didn't have any money and couldn't raise money because they couldn't lodge accounts with the ASX to keep trading because they didn't know what the final payout to the creditors of Platinum would be. A chicken egg of grand proportions.
Meanwhile, Macquarie has already allegedly pumped and dumped the stock making it look doggish. And there were some teething problems with the plant i.e. the ball mill was a dog. There were definitely problems, but they had built a 40koz per annum plant 800m from one of Brazil's best gold mines - and probably connected to the orebody.
So CDG had no cashflow from operations, couldn't raise money because the administrators of Platinum wouldn't go away and Macquarie had made them look 2nd rate. Meanwhile, there's still a potentially beautiful mine sitting there in Brazil doing nothing.
DM has done such an admirable job trying to save the project, not taking salary for years and even putting his house against a raise. It's not 100% over but is 100% in limbo.
CDG Price at posting:
7.0¢ Sentiment: None Disclosure: Held
