TORONTO (miningweekly.com) – Gold miner Besra Gold Inc (BGI) has filed a proposal for consideration by its creditors in Toronto, in an effort to secure balance sheet relief and to obtain further financing to return to normal operations.

The proposal, if accepted by the requisite majority of creditors and approved by the Ontario Superior Court of Justice, would provide potential new investors with certainty of Besra’s financial position. 

Should the court issue an order approving the proposal, BGI would apply to the Ontario Securities Commission to lift or vary the existing cease trade order and complete an exit financing, contemplated by the proposal, within six months. BGI stated that it would work intensively with its potential exit financiers to complete the funding as quickly as is practically possible to facilitate a return to normal operations and restart investment in the Bau exploration property, in East Malaysia.

The company's liquidity position deteriorated last year as a result of negative cash flow from operations in Vietnam, caused by typhoons and government intervention, as well as a consequent inability to secure all required capital until its unsecured loan-notes were restructured. However, the company said subsidiary operations were recovering with Bong Mieu operating at minimal levels while the ongoing licensing situation remained uncertain.

The Phuoc Son mine was preparing to draw down local loan funds in preparation for a return to production in the next six months.

A C$15-million financing deal was last year placed on hold, pending the outcome of the restructuring. In October 2014, BGI inked an agreement with private investor George Molyviatis, the chairperson of InCoR Holdings. BGI had, to date, received a first tranche of C$2-million. Under the terms of the transaction, once the full C$15-million investment was made, Molyviatis would own an effective 50.9% stake in BGI.

The company expected to return its focus to the Bau property once the proposed financing was concluded. Planning was under way for a three-year exploration programme targeting progressive increases in the existing 3.3-million-ounce resource to 4.5-million ounces and beyond. Further testwork would be undertaken in parallel with improving the resource, which would optimise production scenarios for Bau.

The company advised that, following the restructure and refinancing, Besra would also look at relisting on an appropriate trading platform such as  the TSX, ASX or an Asian bourse.