Herencia Resources hits stumbling block in Paguanta sale

Herencia Resources hit a fresh stumbling block in its sale of Paguanta Resources on Monday, with the potential purchaser pushing the date back and the company only weeks away from possible insolvency.

On 10 May, the AIM-traded firm announced it had entered into a transaction with Golden Rim Resources under which it would sell all of the issued shares in Paguanta.

Paguanta holds 70% of the shares in Compania Minera Paguanta, which holds mineral concessions at the Paguanta silver-lead-zinc-copper project in northern Chile.

Completion under the proposal was due to take place no later than Monday, however due to delays with the “flow of information”, the parties have agreed to extend the date of completion to no later than 29 July.

“On 15 June, the company made a further announcement with the execution of formal documentation following which Golden Rim provided Herencia with the second tranche of the deposit, totalling $0.1m being sufficient working capital to last to at least end of July,” Herencia’s board said in a statement.

“There can be no guarantee that the company will be able to continue trading after this time.”

Herencia said it has been notified by Golden Rim that they are well advanced in their due diligence investigations, with technical due diligence complete and “only a few” financial and legal due diligence matters still outstanding.

“There can be no guarantee that the proposed transaction will complete,” Herencia’s board warned.

“Further updates will be provided by the company as the due diligence is finalised.”