Coalspur Mines (Operations) Ltd., a Hinton, Alberta-based coal development company which owns and operates the Vista Coal Mine Project, filed for CCAA protection on April 26, 2021. While the company’s operations have significant value, with Phase I alone having the capacity to produce roughly 6.5 million tonnes of clean coal per year, Coalspur’s ability to conduct its business and generate revenue and liquidity has been severely impacted by: (a) the shut down of the mine in February 2021 as a result of a permitting issue with the Alberta Energy Regulator ("AER"), thereby suspending all coal production and cutting off Coalspur’s only source of revenue; and (b) the simultaneous crystallization of an approximately $59.9 million USD hedge obligation to Trafigura Lte. Ltd. following the rapid escalation in global coal prices in late 2020. Coalspur has now resolved the permitting issue with the AER and received approvals to restart mining operations. However, Coalspur lacks sufficient funding to restart the Project and begin producing coal because of the depletion of its coal inventory and the loss of all revenue since January 2021. FTI was appointed monitor. Counsel is Osler for the company and Blakes for the monitor.
Algold Resources Ltd. (TSX: ALG), a Montreal, Quebec-based junior mining company that focuses on the exploration and development of gold deposits in West Africa, filed an NOI on January 15, listing approximately $16.8 million in liabilities, including $9.8 million to Aya Gold & Silver Inc. ("AGS"). The pre-COVID-19 pandemic macro-economic background of gold, including increasing interest rates, stronger USD, and the downward trended price of gold, has led to a challenging financing environment for junior gold exploration projects. In addition, the jurisdiction in which the company operates, Mauritania, has been the object of certain negative perceptions in the industry and among investors that have made it more difficult to attract financing and support. Confronted with various liquidity issues and difficulties in raising debt or equity financing, the company ceased its operations on November 19. In June 2020, IIROC issued a cease trade order against the company. AGS, a Canadian mineral exploration and development company, has notified the company of its interest in providing interim financing during the court-supervised restructuring proceedings. Raymond Chabot is the proposal trustee. Counsel is Lapointe Rosenstein Marchand Melançon for the company and Dentons for AGS.
Northern Silica Corporation, a Calgary, Alberta-based company operating an integrated silica mining and transport business, along with several related companies (collectively, the "NSC Companies"), obtained protection under the CCAA on June 30 on application by QMetco Limited and Taurus Resources No. 2. B.V. As of March, the companies have approximately $89.8 million in liabilities and $66.0 million in assets. The NSC Companies' silica mining takes place at mining facilities near BC ("Moberly Plant"), which can produce frac sand, and transport takes place at a facility in Alberta ("Penhold Facility"). Since early 2019, frac sand prices and demand have decreased. In addition to these market-wide issues, because the operations at the Moberly Plant have been uneconomic at this time, operations were shut down in late February. During the CCAA proceedings, the companies will be implementing a court-supervised sale and investment solicitation process. Vitreo Minerals Ltd. will be providing up to $3.0 million in DIP financing. Alvarez & Marsal was appointed monitor. Counsel is McMillan for the company, Cassels for the applicants, and Torys for the monitor.
Dominion Diamond Mines, a Calgary, Alberta-based diamond mining company with ownership interests in two large diamond mines in the Northwest Territories, filed for protection under the CCAA on April 22, listing approximately $70.2 million (USD) and $110.9 million (CAD) in liabilities. The company has historically supplied rough diamonds to the global market through its sorting operations in India and a sales centre in Belgium. It has been one of Canada’s largest independent diamond producers and one of the largest private employers in the Northwest Territories. The global COVID-19 shutdown of commercial trade and travel in March has effectively frozen the company's ability to move its rough diamond inventory, worth nearly $200.0 million, from the two mines to the company's sorting facilities in India for further movement for eventual sale on the world market. The company's inability to generate revenues from ordinary course sales of diamond inventory has resulted in an urgent liquidity crisis and the company is unable to meet its obligations as they generally become due. FTI is the monitor. Counsel is Blakes for the company, Bennett Jones for the monitor, and Cassels for the Government of the Northwest Territories.
Ontario Graphite, a privately-owed Canadian mining company engaged in the re-commissioning and operation of a mining property near Kearney, Ontario, obtained protection under the CCAA on February 12 on application by Orionis, owed approximately $15.0 million (USD). Since at least September 2015, the company has been suffering from operational and liquidity issues. Orionis subsequently advanced funds to the company pursuant to three secured notes. While Orionis has worked collaboratively with the company for several years to resolve its financial and liquidity issues, Orionis is no longer prepared to fund the company outside of a court-supervised process. The company will be able to borrow up to a maximum of $2.8 million in DIP financing from Orionis while it runs a sale and investment solicitation process. Deloitte was appointed monitor. Counsel is Osler for the applicant, BLG for the monitor and Miller Thomson for the company.
Nemaska Lithium (TSX: NMX), a Montreal, Quebec-based minerals mining company, obtained protection under the CCAA on December 23. The company is is in the process of developing a mine in the James Bay Region of Quebec that it hopes will enable it to become one of thew world's most significant lithium salts producer and supplier to the emerging lithium battery market. To date, over $616.0 million has been spent on construction and engineering costs, funded by a combination of debt and equity from government and private sources, including Softbank. In February 2019 it was determined that additional funds of approximately $375.0 million were required to complete construction of the mine and processing plant. Significant efforts were undertaken to find investors, buyers or partners but to date no binding agreements have been reached. Despite a strong long-term outlook for lithium, prices have recently plummeted as a result of increased supply, primarily from Australia, where producers have lower extraction costs and are in closer proximity to the Chinese markets. The mine is currently in a care and maintenance program as the company seeks to conserve cash while it evaluates its restructuring options. PwC is the monitor. Counsel is McCarthy Tétrault for the company, Goodmans and Woods for Nordic Trustee AS, Miller Thomson for Bird Civil & Mines, Torys for OMF Fund II (N) Ltd., Dentons for Chubb Insurance, Norton Rose Fulbright for Investissement Québec and Lavery for Allied World Specialty Insurance
Lydian International (TSX: LYD), a Toronto, Ontario-based gold exploration and development company focused on construction of a gold mine in south-central Armenia, obtained protection under the CCAA on December 23. The company obtained an exploration license in 2006 and since then has invested more than $400.0 million in the project. The mine was 75% complete in May 2018 when a new prime minster came to power in Armenia. After the change in government, demonstrations and road blockades occurred sporadically throughout Armenia, including at the company's project. In addition to the blockades, additional audits and investigations have been imposed on the company, and a material water supply agreement was unilaterally terminated. As a result of these external factors, the company has dismissed more than 90% of its workforce and terminated substantially all of its supply relationships. The group has also defaulted on substantially all of its obligations to its lenders. Since October 2018, the company has entered into multiple forbearance agreements with its lenders, the most recent of which expired on December 20. 2019. While under creditor protection, the company will continue discussions with stakeholders in an attempt to restart construction. It will simultaneously canvas the market for parties interested in funding either the project or the company's potential international arbitration proceedings against the Armenian government. Edward Sellers of Black Swan Advisors is the company's interim president and CEO. Alvarez & Marsal is the monitor. Counsel is Stikeman Elliott for the company, TGF for the monitor, Blakes for Resource Capital Fund VI L.P., Norton Rose Fulbright for OSISKO Bermuda Limited, Torys for ORION Capital Management and DLA Piper for ING Bank N.V./ ABS Svensk Exportkrerdit (publ).
Yukon Zinc, a Vancouver, British Columbia-based company that owns the Wolverine Mine in the Yukon Territory, was placed in receivership on September 13 on application by the Government of Yukon, which has grown increasingly concerned about the continually deteriorating condition of the mine site, as well as the company's failure to pay approximately $25.0 million in security outstanding since May 2018. On July 31, a day before the hearing of the Government of Yukon's petition to appoint a receiver over the company, the company filed an NOI, though a limited lifting of the stay was subsequently ordered to allow the Government of Yukon to proceed with its application to appoint a receiver. On September 5, a material adverse change was reported by the company's proposal trustee after the company failed to make certain forecast post-filing payments, including $618.0 thousand on account of projected remediation costs. PwC was appointed receiver and will be running a sales process for the company's assets, including the Wolverine Mine. Alvarez & Marsal is the proposal trustee. Counsel TGF for the applicant, Fasken for the company, Dentons for the receiver and BLG for the proposal trustee.
Stornoway Diamond (TSX-SWY), a Montreal, Quebec-based diamond mining company that owns and operates Quebec's first and only diamond mine, obtained protection under the CCAA on September 9. Construction of the company's mine in Northern Quebec commenced in 2014, funded by a $946.0 million financing package that included equity, senior and convertible debt, equipment financing and the world's first ever diamond stream. The project was heavily supported by the Quebec government, which considered the mine an integral component of its "Plan Nord" initiative to enable development of the northern part of the province and its local communities. Commercial production commenced in 2017, but the mine's performance fell significantly short of expectations as a result of delays in the ramp-up of the mine, lower grade ore, and higher-than-anticipated levels of diamond breakage. Adding to the company's difficulties was a declining price for rough diamonds. When production commenced, the market price was US $147/carat. By the second quarter of 2019, the price was only US $76 / carat. Unable to operate profitably under its current conditions, and with no additional liquidity available, the company concluded that it had to restructure its balance sheet and launched a sale and investment solicitation process in April 2019. The process led to a proposed transaction with certain of the company's existing stakeholders, which the company will attempt to complete while under creditor protection. Deloitte was appointed monitor. Counsel is Norton Rose Fulbright for the company, Osler for the monitor, McCarthy Tétrault for Investissement Québec and Diaquem and Fasken for the Caisse.
Yukon Zinc, a Vancouver, British Columbia-based company that owns the Wolverine Mine in the Yukon Territory, filed an NOI on July 31, listing $16.4 million in liabilities. The NOI filing comes a day before the hearing of the Government of Yukon's petition to appoint a receiver over the company. The Government of Yukon has grown increasingly concerned about the continually deteriorating condition of the mine site, as well as the company's failure to pay approximately $25.0 million in security outstanding since May, 2018. Over the company's objections, the court has granted a limited lifting of the stay to allow the Government of Yukon to proceed with its application to appoint a receiver. Alvarez & Marsal is the proposal trustee. PwC is the proposed receiver. Counsel is Fasken for the company, BLG for the proposal trustee and Dentons for the proposed receiver.