Lithium miner Alita Resources Ltd. said Aug. 16 that it entered into a standstill agreement with its lenders led by Tribeca Investment Partners Pty Ltd. after the company received a notice of default regarding a secured A$40 million loan facility.
Alita Resources said that the asserted events of default are related to the non-acceptance by the lenders of an updated life of mine plan for Bald Hill in Western Australia, alleged failure to comply with the physical parameters of the previously approved life of mine plan, and the company suffering a material adverse effect to its performance due to the deterioration of the lithium spot price and weakened market demand for spodumene concentrate.
The company said that its mining contractor started reducing operations at Bald Hill on Aug. 16, pending outcome of the negotiations. The scale back in operations is expected to result in an event of default relating to mining parameters being triggered under the loan facility.
The event of default is covered by the standstill agreement while it is in force.
