Goldmmers owed $1M

Press, 21 July 1988, Page 23

Goldmmers owed $1M

By

NEVIN TOPP

West Coast miners are owed about SNZLI million in gold because of the receivership of Goldcorp Refiners, the Greymouth gold refinery company.

An agent for the receivers, Mr Chris Turland, of the Christchurch office of Arthur Young, the accounting firm, said about 80 miners had about 1600 troy ounces of gold in “non-allocated metal accounts.” The miners had placed gold in the metal accounts, some of which dated back to before 1985 when the refinery was known as Sweetman and Corcoran. The non-allocated metal accounts allowed miners to bring gold to the refinery without immediate payment. The gold was credited to the account and later the miner could either claim payment or take the gold back (often used for the repayment of a gold-security loan). It appeared the matter was not covered by statutes covering banking or the Insolvency Act. The running of the nonallocation metal accounts was standard procedure

in gold mining, “but I would think that people will be altering their operating procedures now.” It had yet to be decided whether the miners were placing gold in trust accounts, safe custody, or whether there was a hypothetical sale of the gold to the refinery, Mr Turland said. Mr Turland does not expect any outcome on the legality of the accounts for up to 18 months.

“It might require the receivers to go to court to get a ruling, or for a miner to make a challenge through the courts. “The situation is similar to where a bank goes broke and the amount of cash held does not cover all the amounts held in accounts.” The creditor status of the miners has yet to be decided — whether they are unsecured creditors, rank between unsecured creditors and debenture-

holders, rank pari passu with debenture holders, or are first in line.

The changing price of gold complicated the matter.

“A substantial sum” was owed to Goldcorp Refiners by its parent company, Goldcorp Exchange (in receivership), because the Greymouth company was running its own nonallocated metal account with the Auckland firm, Mr Turland said. This meant that there was a further shortfall in gold. The West Coast Commercial Gold Miners’ Association has called a meeting in Greymouth for this evening to discuss the receivership in relation to metal accounts and forward selling of gold. As reported yesterday, the gold refinery owned by Goldcorp Refiners has been sold to Catene D’ltalia, a precious metal chain manufacturing company from Australia.