Consolidated Minerals to open talks on 8% notes; holder list needed

By Susanna Moon

Chicago, March 8 – Consolidated Minerals Ltd. said it assembling a list of holders of its 8% senior secured notes due May 15, 2020 in order to begin a “dialogue” with noteholders as manganese ore prices tumbled to record lows in January.

To move things along, the company is asking noteholders to form a committee to represent the interests of the wider group, according to a company press release.

Consolidated Minerals is looking to discuss its options in the second quarter given “the current trading environment and the level and speed of depletion of its cash balances,” the release noted.

The company noted the market “outlook remains uncertain despite global supply cuts as these are not permanent and can be reversed if supplier discipline erodes.”

The company had a balance of net cash and cash equivalents of $41.21 million as at Feb. 29, slashed from $75.9 million as of Dec. 31.

As with other commodities, the price for manganese lump has slumped, the company said, plummeting to $1.85/dmtu in January, down 57% from $4.35/dmtu at the start of 2015.

A key factor is the slowdown in the Chinese economy, which is continuing to drive prices down on its domestic steel and alloy industries, bringing about reduced manganese ore demand, the company said.

In response, the company said it is continuing “to implement cost-cutting and intensify marketing efforts to remain competitive.” The company said its Woodie Woodie operations in Australia have now ceased and the assets are on care and maintenance.

For questions on the upcoming discussions, contact Cleary Gottlieb and Rothschild, the company’s advisers: Roger Ewart Smith, at +44 0 20 7280 5424 or Roger.Ewart.Smith@Rothschild.com, Arnaud Joubert, +33 0 1 40 74 98 36 or Arnaud.Joubert@Rothschild.com, Simon Bard at +33 0 1 40 74 41 66 Simon.Bard@Rothschild.com, or David Billington at +44 0 20 7614 2263 or dbillington@cgsh.com.

In order to begin talks with its noteholders, the company said it is starting a noteholder identification process through an identification agent, D.F. King Ltd. (Ken Abela, +852 3953 7230 / ken.abela@orientcap.com, or Laurent Muzard, +44 207 920 6918 / laurent.muzard@orientcap.com).

Consolidated Minerals is a St. Helier, Australia-based manganese mining firm with operations in Australia and Ghana.

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