Lack of finances forces Bong Mieu gold mine to close

March 18, 2019 | 12:20

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Despite officially going bankrupt, Bong Mieu Gold Mining Co., Ltd. (BMGMC) has yet to close the mine and restore the area due to a lack of finances.

lack of finances force bong mieu gold mine to close

Bong Mieu gold mine cannot be closed and restored as the investor has ran out of funds

Notably, the company’s licence to exploit gold at Bong Mieu gold mine in Phu Ninh district, Quang Nam province, expired three years ago and the Ministry of Natural Resources and Environment urged the company to complete the dossiers to close the mine numerous times. However, to date, the company has yet to comply, although it is far past the last deadline of June 2017.

On March 5, the leaders of the Quang Nam People’s Committee and the General Department of Geology and Minerals of Vietnam attended a working session to discuss plans to close the mine. Accordingly, the work is estimated to cost up to VND19 billion ($826,100).

Previously, in November 2018, the Quang Nam People’s Court held a creditors’ meeting to decide the fate of Bong Mieu, whether to file for bankruptcy, declare bankruptcy or resume operations. They later went for the initiation of the bankruptcy process with the endorsement of 14 out of 24 creditors.

According to the company’s financial statement, as of November 2017, BMGMC amassed VND1.26 trillion ($54.78 million) in debts and VND1 trillion ($43.47 million) in accumulated loss, which exceed its total equity by up to VND966 billion ($42 million).

BMGMC is a subsidiary of New Zealand-based Besra Gold Inc., which was granted an exploration license in Vietnam until March 2016. However, the company continued mining operations despite repeated warnings from the authorities and related agencies.

The company submitted a request to the Department of Biology and Minerals asking for an extension, but was told that there is no basis to grant its request. However, it was not until May 2017 that the company closed the gold mine, complying with the order of Quang Nam authorities.

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