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Update On Allied Nevada Gold Corp. (OTCMKTS:ANVGQ) TSX Delisting Review

TSX has decided to delist the common shares of Allied Nevada Gold Corp. (OTCMKTS:ANVGQ) at the close of business on April 16 as the company failed to fulfill the continued listing guidelines of TSX. Allied, the operator of Hycroft mine, filed for bankruptcy protection after operational setbacks and decline in gold prices eroded company’s profitability at its working property.

The bankruptcy details

Allied Nevada listed assets of $941 million and $664 million of debt as of December 31, 2014 in Chapter 11 documents filed in U.S. Bankruptcy Court in Wilmington. It confirmed that it reached an agreement with some of the bondholders for $78 million in financing. The generated funds will help the company to support its operations as it restructures. Allied has close to $4.5 million in cash as per the reported filings.

Operational setbacks

 ANVGQ shares traded above $45 back in 2011. It was the same year when gold prices peaked. Thereafter, the shares declined 80% to 17 cents on Tuesday. It had struggled with setbacks at Hycroft mine when a chalky substance slowed production. As a result, the miner was forced to lower its annual silver and gold forecasts. It has contended with declining gold prices. The yellow metal declined 28% in 2013 and 1.4% in 2014. The drop in 2013 was the first annual decline in past 13 years.

The cash

Allied Nevada Gold Corp. (OTCMKTS:ANVGQ) cash eroded to dangerously low levels, merely $1.3 million at the end of November 2014 and then it raised $21.5 million in December. The debt widened to $567.9 million by November 30, 2014 including $48 million in borrowings under a loan. Also, it stated that mill construction would cost approximately $1.4 billion. It hired Bank of Nova Scotia and Credit Suisse Group AG last year to advice on alternatives for financing the mill. The company owns over 50 Nevada properties bought in a merger.

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