|Cadan takes its responsibilities to the local community and environment very seriously. It has developed strong relationships with the local communities and government entities.|
AFTER surviving a difficult 12 months through Board and management disruptions, limited access to funding and legacy issues impacting production at its T’Boli operation, Cadan Resources has commenced a strategic review. The review was announced in early May and is expected to take three to four months to complete Cadan’s president and CEO Peter Cunningham is managing and directing the process and has committed to provide an update by the end of June.
Cadan’s Board of Directors and management structure has undergone significant changes in the past 12 months, culminating in the departure of four directors at the AGM. Shareholder action drove the change, resulting in the board reducing to four directors in the short-term, including Peter Cunningham remaining as president and CEO.
The company recognizes that in order to successfully develop its assets and rebuild it needs to be adequately funded as well as appropriately managed and structured for the scale of the business to actively attract investments. It believes recent additions to the Board and management are the nucleus for rebuilding the corporate structure and management with the review being the most logical next step.
The review will include:
- Reviewing debt with the aim of restructuring;
- Assess status of T’Boli including optimizing production, costs and capital requirements;
- Exploration assets - evaluate brownfield and greenfield opportunities defining priorities and strategy going forward including capital requirements;
- Review management processes at both corporate and operation levels;
- Determine appropriate Board size and identify list of appropriate candidates who can contribute to the business;
- Investigate all contractual and financial agreements; and
- Conduct shareholder feedback
The objective is to identify any structuring and financing issues within Cadan and its operations, provide viable working solutions and develop a positive business plan to move forward. The review will also identify capital requirements to appropriately fund Cadan for the next two years, along with providing production and earnings targets.
In the interim, the company has drawn down a further US$500,000 from Mighty River International of Singapore under an existing facility agreement to fund dewatering and maintenance at T’Boli and commence processing low-grade stockpiles. This is expected to provide cash flow which will be directed to the affairs of Cadan’s Philippine business.
On May 23 Cadan announced that as per the terms of the May 2, 2103 Mighty River agreement, Mighty River had agreed to extend the drawdown period and permit additional draws of US$657,470 which have been funded. The facility allowed for drawdowns for an aggregate amount of US$5 million of which Cadan has drawn US$3,985,470. Mighty River is entitled to receive a 1% production royalty on T’Boli for each US$1 million advanced.