today's west australian

Windimurra on the brink as directors quit
17th February 2009, 6:00 WST



Windimurra Vanadium’s woes worsened yesterday when two more directors jumped ship amid fears the cash-strapped miner may have to call in administrators.

Ricardo Leiman, a representative of Windimurra vanadium offtake partner Noble Group, quit suddenly alongside Nicholas Morland, who only joined the board as a non-executive director last May.

Mr Morland is thought to have represented Windimurra’s influential group of UK investors. No explanation for their resignations was given and Windimurra officials yesterday refused to comment further. In a further ominous sign, WestBusiness has learnt that Windimurra has called in Martin Jones, of administrators Ferrier Hodgson, for advice.

Neither Windimurra chief executive Iain Scott nor Mr Jones returned calls yesterday.

But it is understood that Ferrier has been working with Windimurra for the past two weeks after a proposed capital raising, organised by Morgan Stanley, collapsed.

Windimurra needs $81 million to complete construction of its namesake vanadium mine near Mt Magnet and had hoped to raise the funds through a combination of share placements, a rights issue and more debt facilities.

Failure to raise the cash is likely to tip Windimurra into administration.

Windimurra officials are thought to have travelled to Hong Kong last week to discuss their financing woes with Noble, the trading group that owns 10 per cent of the vanadium project and has entered into a life-of-mine offtake agreement at a metal price no lower than operating costs.

Noble also owns a small equity stake in Windimurra.

Several broking houses approached Windimurra late last year with proposals for a rights issue, just before the sharemarket collapsed. Windimurra, at that stage confident it had sufficient cash to complete construction, rejected the advances.

But big problems with some key contractors involving the vanadium refinery has caused cost blowouts and an up to four-month delay before first ferrovanadium can be produced.

The original production target date of last month has been pushed back to May or June, further delaying prospects of much-needed first cash flows.

Windimurra’s shares were worth $3.06 in late May before collapsing to just 17¢ a week ago, when the company asked for trading to be suspended while it was “negotiating a possible capital raising�.

PETER KLINGER