MinRes to take over collapsed garnet miner run by Ellison’s brother
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The news: Mineral Resources is set to take control of Resource Development Group, a collapsed garnet miner previously led by Andrew Ellison, brother of MinRes managing director Chris Ellison, after cutting off its credit in July.
The context: Administrators McGrathNicol have recommended creditors vote in favour of a MinRes proposal to acquire RDG’s shares and assets, cancel more than $161 million in loans and credit facilities, and pay all employee and non-related party creditor claims.
McGrathNicol found no evidence of wrongdoing but cited insufficient independent due diligence on RDG’s projects.
RDG had become wholly reliant on MinRes to maintain solvency, burning through almost all of a $135 million loan by December and remaining cash-flow negative, according to a report to creditors by administrators McGrathNicol.
Andrew Ellison was made redundant on 4 August and will receive $2000 as an excluded creditor, the report said.
A creditor vote is scheduled for 1 September.
The sources: McGrathNicol, The Australian, The Australian Financial Review
