Trade in Navan shares halted again

Navan Mining is again facing liquidation unless a further injection of funds can be arranged by the cash-strapped company.

Shares in Navan were temporarily suspended on both the Irish and London Stock Exchanges yesterday at the request of the company. The shares, which traded at 52p two years ago, were suspended at a price of 1.275p, pending clarification of the company's working capital position. This is the second time within a year that the company's shares have been suspended.

Sources close to the company said Navan had simply run out of cash. It is understood that the company's main bankers, Deutsche Bank, are not prepared to put any more money into the company.

Attempts to arrange a cash injection by a North American banking group are believed to have failed at the last minute, prompting yesterday's suspension request.

However, sources familiar with the situation said a solution was still being sought. The key issue to be agreed is the valuation to be put on the company's remaining assets in Bulgaria. The company's board is due to meet next week to consider the options.

But unless Navan can get its hands on sufficient cash to tide it over until its Chelopech gold mine in Bulgaria starts to generate cash next year, the outlook for the company is pretty gloomy, market sources said.

Navan first ran into difficulties last year when its Spanish operations were hit by the collapse in the world zinc price and a fall in the local market for sulphuric acid.

The problems became critical in October 2001 when Enron, with which Navan had a financing agreement related to the sale of concentrates to smelters, collapsed.

A subsequent restructuring and refinancing raised $23 million earlier for the company but unexpected costs incurred in Spain, completion of an expansion programme at Chelopech and exploration costs associated with its other main asset, the Krumovgrad goldmine in Bulgaria, have eaten into this.

Navan, which has a secondary listing on the Irish stock market, became a UK-incorporated company with British headquarters in 2000. Although a number of Irish retail investors remain on its share register, the bulk of the shareholders are believed to be in Britain. Navan employs around 600 people, mainly in Bulgaria.