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Preston Resources, a small Australian gold mining company, bought the Bulong nickel mine for AUD319 million in November 1998 and financed the acquisition by issuing a USD185 million (AUD294 million) project bond. At the time, mining had been underway for several months and construction of the processing plant was essentially complete. Almost from the beginning, however, a series of design and operating problems shut down production and required costly repairs. Although processing performance improved by late 2000, maintenance issues continued to plague the plant, and output remained significantly below forecast levels. This case, set in 2002, concerns the financial consequences of these problems, including a bond default in January 2000 and Preston's efforts to restructure the project debt.