Australian zinc explorer Heron Resources gets waiver on debt facility

Woodlawn mine in New South Wales. Image by Heron Resources Ltd.

Australia’s Heron Resources Ltd said on Monday it received an extension to waivers regarding a loan facility, giving the cash-strapped zinc explorer more time to come up with a funding plan.

A cash crunch due to a 7 month delay in the completion of construction at the company’s zinc and copper-bearing Woodlawn mine in New South Wales prompted Heron Resources to enter a standstill agreement with its lender in August.

The agreement had given the company time until Sept. 27 to come up with a financing package that addresses its potential short-term capital crunch.

Heron’s cash woes come at a time when zinc prices have dropped sharply due to a supply glut, with prices in London hitting a three-year low of $2,190 at the start of the month.

The lender has now agreed to an extension, waiving potential non-compliance with provisions contained in the senior loan facility and certain other liquidity level requirements, Heron said in a statement.

(By Rashmi Ashok; Editing by Aditya Soni)

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