Baja Mining Corp. (TSX: T.BAJ, Stock Forum) said its lenders have granted the company a 45-day standstill that will give the company until August 1, 2012 to find enough cash to fulfill the companys funding requirements for its 70%-owned subsidiary Minera y Metalurgica del Boleo S.A. de C.V.
MBB is the firm that is building Bajas flagship Boleo mine in Mexico.
Recently, MMB made a $21 million cash call to its shareholders. Baja provided its 70% share ($14.7 million) and the Korean Consortium provided its 30% share ($6.3 million).
This cash injection allows MMB to continue its current level of critical path activities at the Boleo project, including all contractors continuing to work on the copper circuits until the end of July writes Canaccord Wealth Management in its Morning Coffee newsletter.
The company got into trouble in late April when it announced that without additional funding, its Boleo project will have to be halted. The company said the project overshot its budge by about 22% or $246 million, more than the $1.14 billion estimated in 2010.
The news of the standstill agreement was a smaller glimmer of good news for a company that had been battered in the last six months. Along with the horrendous cost overruns from Boleo, the company has suffered from a divisive proxy battle along with the resignations of key members of the companys management team.
However as shareholders prepared to meet in Vancouver Thursday, the stock was down 7% to 20.5 cents in early trading, leaving Baja with a market cap of $69.7 million, based on 340.2 million shares outstanding. The 52-week range is $1.28 and 15 cents.
