Heron Resources CEO Tim Dobson says the company is not trading insolvent and that scenario is a "worst case."

The company suspended operations in March and made 90 direct employees redundant. At the time, Mr Dobson cited coronavirus travel and other restrictions and a metal market downturn as key factors. The mine relied on a proportion of interstate workers.

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In May, Heron also terminated the contract of Pybar Mining Services, which had been commissioned to deliver mining at the lead, copper and zinc operation, near Tarago. It was given 30 days' notice and no production has occurred at the site since March.

Mr Dobson said Pybar had made a financial claim against Heron but declined to name a figure. The company had about 80 employees at Woodlawn.

But they are not the only ones. The CEO told The Post there was "a whole bunch" of unsecured creditors.

On July 8, six people, including current and former employees of a creditor staged a picket outside the mine gate, holding placards that included a list of some parties owed money and blocking the entry with vehicles.

Mr Dobson said there was only one direct Heron worker involved, which he did not understand as all laid off employees were paid their entitlements.

"It was a bit of a show, unfortunately, but we totally understand that creditors want to know when they will be paid," he said.

"We can't give them an answer at this stage because we are working on a solution to avoid insolvency."

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Mr Dobson said there was a "long list" of creditors but could not state the exact number.

Negotiations are underway with senior debt provider, Orion Mine Finance, to extend its standstill agreement beyond June 26. That company has loaned $90 million for the Woodlawn venture. As a secured creditor it would have control over all assets and Heron's bank funds if it became insolvent. Anything above the $90m would go to unsecured creditors.

Two other international finance companies would be among them. Mr Dobson said Greenstone Finance of London and Minneapolis-based Castlelake had loaned $210m between them. But as their equity was in the form of shares and convertible notes, they were also unsecured creditors.

Orion has now extended its loan default waiver three times.

"Since the shutdown we have been trying to negotiate a way forward with these three groups and to get money in," Mr Dobson said.

"The reason it has taken so long is that they are based all around the world and we want to achieve a solution that makes sense to them individually."

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He was hopeful of a breakthrough and said his main aim was to avoid insolvency and find a path forward to "bring Woodlawn back to life." Mr Dobson acknowledged mining services would have to be re-tendered. Workers would also have to be found. Heron opted for redundancy over stand-down, saying the mineral market could take six to 12 months to recover.

Some 50 to 60 contractors also lost work as a result of the shutdown.

Since then, Heron has approached the federal and state governments for support. Mr Dobson said he'd received no response from Hume MP Angus Taylor and talks with the state were "bogged down in bureaucracy across five departments."

However the CEO said it was clear in March that Heron was on a trajectory to run out of cash in two months without a major injection. When zinc prices "collapsed" and many of Heron's contract workers were called back to Western Australia due to border closures, the board decided to "stop the cash burn."

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Mr Dobson started in the job on March 23 and said he never would have expected the shutdown two days later.

A community consultative committee has been kept informed of events. It will meet again in two weeks.

Meantime, the mine is in care and maintenance mode. Despite some recovery in zinc prices, Mr Dobson says he can't give any guarantees on a restart date.

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