Aurcana Silver Corp (TSXV: AUN) is one of the biggest movers of the day, trading up 66% at just $0.02 per share, following news late Thursday ahead of the Canada Day long weekend that debt extensions would no longer be provided by its lender, Mercuria Energy Group.
The company owes funds to Mercuria under a $28 million term loan agreement that closed in early December 2020. The debt was to be used to fund the restart of the Revenue-Virginius mine, more commonly known as the RV mine.
A termination of the loan was announced barely three months later.
The status quo, by all accounts, seems to be tied to the need for more capital. Under the status quo, Aurcana needed to find $25 million in additional cash. This liquidity never appeared.
With cash not materializing for the company, Mercuria grew tired of extending the standstill agreement and, as of July 1, no longer provides such extensions. Instead, the firm is filing a motion to appoint a receiver, which will be filed in Colorado. Specifically, the company is asking the court to appoint a receiver for the RV mine, Aurcana Silver’s flagship asset.
The RV mine served as collateral for the $28 million loan to Aurcana.
The development follows the departure of two directors from the company’s board on June 23, an apparent sign of what was to come for the company.
Aurcana Silver last traded at $0.03 on the TSX Venture Exchange.
Information for this briefing was found via Sedar and the companies mentioned. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.
As founder of The deep dive, Jay focuses on all aspects of the business. This includes operations, as well as serving as lead writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay writes freelance for a number of companies and has been published on Stockhouse.com and Canna Investor Magazine among others.