Cline Mining (TSX: CMK), financially stressed in part due to its idled coal mine in Colorado, said June 3 that the rights offering contemplated under the recapitalization agreement with Marret Asset Management as agent for the bondholders and standby purchasers, will not be proceeding.
Cline Executive Chairman Mark Haywood stated: “Cline is focused on reducing its operating costs and maintaining the New Elk mine in statutory compliance whilst it discusses an alternative recapitalization proposal with Marret.”
Under the recapitalization agreement, Cline filed a preliminary short form prospectus dated April 25 with respect to the rights offering and issuance of warrants to its shareholders. The company said it will be withdrawing the preliminary prospectus.
Cline is a Canadian mining company focused on the development of its 100% owned New Elk coking coal deep mine located in Colorado. The company also has interests in metallurgical steel making coal reserves in western Canada, an iron ore project in Madagascar, and the Cline Lake gold property in northern Ontario, Canada.
Cline Mining said May 21 that Haywood had been appointed as Executive Chairman of the board of directors of Cline and that its board chairman had resigned. Haywood joined the board of directors on Feb. 11.
Cline Mining also said that Bill McKnight resigned as chairman of the board of directors effective May 18. McKnight had served as a director of the company since December 2004 and as chairman of the board since January 2005. McKnight will continue to serve as a director of Cline Mining.
Also, Peter Elzinga has resigned from the company’s board of directors. Elzinga had served as a director of Cline since June 2010.
Cline began coal production at the long-shut New Elk deep mine in December 2010. It wants to hit an output level of 3 million tonnes annually in a room-and-pillar configuration, with a production boost later with the installation of a longwall. But due to depressed coal markets and a difficult global economic and financial environment, the mine since last year has been in a temporary care and maintenance program.