Veris Gold files Chapter 15 bankruptcy case, granted CCAA protection

By Caroline Salls

Pittsburgh, June 10 – Veris Gold Corp. made a Chapter 15 bankruptcy filing on Monday in the U.S. Bankruptcy Court for the District of Nevada and was granted Companies’ Creditors Arrangement Act protection by the Supreme Court of British Columbia, according to a news release.

Monday’s order granting CCAA protection also extends protection to subsidiaries Queenstake Resources Ltd., Ketza River Holdings Ltd., and Veris Gold USA, Inc.

Ernst & Young Inc. will act as the court-appointed monitor in the CCAA proceedings to oversee Veris’ operations and report to the court during the restructuring.

Veris said it also received a temporary restraining order from the U.S. court on Monday. That order is in effect pending a full hearing on recognition of the CCAA proceedings.

As a result of the temporary restraining order, U.S. creditors cannot take action against the company and the other CCAA petitioners, including Veris Gold USA.

According to the release, the decision to launch CCAA proceedings was made after extensively exploring alternatives following thorough consultation with the company’s legal and financial advisers. Veris said a special committee has been working for some time on restructuring and refinancing efforts.

The company said it sought protection to address near-term liquidity issues stemming from a decreasing gold price, higher than anticipated production costs, demands for payment under existing loan agreements and unexpected shut downs, including a January shutdown resulting from a December 2013 fire.

Veris said it wants to continue its operational restructuring alternatives while under CCAA protection, including reducing or restructuring its obligations and reducing operating costs.

Any restructuring will be designed to further enhance the company’s long-term financial health, liquidity and competiveness, the release said.

The company said its Jerritt Canyon operation continues to produce gold during these proceedings and is cash-flow positive.

According to court documents, as of March 31, the Veris debtors had total consolidated assets with a net book value of $323 million and consolidated debt with a net book value of $282 million.

The company is represented by Fox Rothschild LLP.

Veris is a Vancouver, B.C.-based gold production company. The Chapter 15 case number is 14-51015.

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