Canadian gold mining company suspends Vietnam operation due to lack of fund

Canada’s Besra Gold Inc has suspended operations at the Phuoc Son gold mine in the central province of Quang Nam because it had run out of money.

The company had only resumed operation in August after finding a bank that would guarantee the tax debts it owed to authorities, which caused the Quang Nam Department of Planning and Investment withdraw the business registration of Phuoc Son Gold, Besra’s Vietnamese subsidiary in charge of operating the Phuoc Son gold mine, in July.

Nguyen Manh Ha, chairman of the People’s Committee of Phuoc Son district of Quang Nam province said that he had received the company’s notice about suspension of operation.

“The company is trying to find funds to restart operation again, but it did not say when it would be able to do so,” he said.

Le Mai Khac Hung, deputy director of the Quang Nam Department of Taxation, said that after resuming operation in August, Phuoc Son Gold paid the tax according to its commitment. Specifically, at the moment, the company had submitted VND120 billion ($5.4 million), out of the VND334 billion ($14.9 million) in tax arrears and VND100 billion ($4.48 million) in late payment fines.

He said that if Phuoc Son Gold does not submit the rest, the department will work with guarantor Viet A Bank.

In Vietnam, Besra operates the Phuoc Son and Bong Mieu gold mines. The company stopped operation of the Bong Mieu mine in July and never resumed it. It still owes the authorities over VND100 billion ($4.5 million) in tax debts from the operation of this mine.

Earlier, on November 18, the company announced on its website that it had closed its long-anticipated CAD10million ($7.41 million) exit financing, thus satisfying the remaining condition precedent to the Amended Proposal approved by creditors pursuant to the Canadian Bankruptcy and Insolvency Act. The company procured the proceeds after selling shares to Pangaea Holdings Limited.

On the occasion, John Seton, Besra’s Managing Director commented that Besra would “re-focus [its] efforts on rebuilding shareholder value, based on [its] world class Bau project in East Malaysia.” He did not mention a plan for the Vietnamese operations.

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By Ha Duy