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.
Quinsam Coal Corporation, a company which owned and operated a coal mine on Vancouver Island, British Columbia, filed for bankruptcy on July 3. The company produced high-quality thermal coal that was sold to the cement industry in British Columbia and to international cement and power-generating customers around the Pacific Rim. Due to a prolonged and steep decline in thermal coal prices, changes in market demand and a decline in productivity of the mine the company ran out of funding to continue operations. The mine ceased operating and was put into care and maintenance at the end of May 2019. The principal objective of the trustee is to attempt to sell and realize on the company's assets and to work with the province to facilitate the wind up and remediation of the mine. PwC was appointed trustee. Counsel is McMillan for the company and Cassels Brock for the trustee.
North American Lithium, an Abitibi, Quebec-based minerals mining company, obtained protection under the CCAA on May 28, owing its creditors approximately $210.0MM, including $99.0MM to Investissement Québec (IQ). Until recently, the company operated a mine producing spodumene, the mineral from which lithium, a chemical widely used to produce batteries, is extracted. The lithium battery market is principally located in China. In recent months, the global price of both lithium carbonate and spodumene have plummeted by 60% as a result of increased supply, primarily from Australia, where producers have lower extraction costs and are in closer proximity to the Chinese markets. Unable to operate profitably under the new market conditions, the company halted production in February 2019. Shortly thereafter, the Minister of Energy and Natural Resources advised that it would commence enforcement proceedings against the company unless it put up a financial guarantee of approximately $23.0MM to cover the costs of a potential rehabilitation and restoration plan. While under creditor protection, the company intends to explore a recapitalization of the business. Raymond Chabot was appointed monitor. Counsel is Fasken for the company, McCarthy Tétrault for IQ, Norton Rose Fulbright for shareholder Contemporary Amperex Technology Canada and Woods for shareholder Jien International Investment.
Nautilus Minerals (TSX:NUS), the Vancouver, British Columbia-based parent company and sole owner of a group of 42 companies (together, the "Nautilus Group") that is in the business of seafloor resource exploration and development, sought protection under the CCAA on February 21. The Nautilus Group, which owes approximately $36.0MM (USD) to its creditors, including $18.3MM to Deep Sea Mining Finance ("DSMF"), has invested significantly in the design and construction of specialized equipment for the purpose of conducting seafloor mineral mining (the "Seafloor Production System"). The parent company has recently encountered difficulty raising additional capital to continue construction of the Seafloor Production System and the continuation of its business. The mining operations do not yet generate any revenue and will not do so until the Seafloor Production System is completed. However, due to lack of funding, construction of the system has stalled. Over the past year, the company has unsuccessfully sought to secure additional financing. The company requires an immediate stay of proceedings under the CCAA to give it the breathing room it requires to implement a sale and investment solicitation plan and complete a sale or restructuring transaction. During these proceedings, DSMF is prepared to advance up to $4.0MM in interim financing. PwC was appointed monitor. Counsel is Fasken for the company and Cassels Brock for the monitor.
Resource Capital Gold and three of its subsidiaries, Flex Mining and Exploration, Maritime Dufferin Gold, and Maritime Gold, filed NOIs on January 28. The Vancouver, British Columbia-based group is an emerging precious metals developer and producer with a number of late stage exploration and development gold assets in Nova Scotia. After commencing operations at its Dufferin property in 2018, the group ran out of funding to continue operations. During the NOI process, the group intends to complete a sales and investor solicitation process. PwC is the proposal trustee. Counsel is DLA Piper for the secured creditor, Sprott Resource Lending, and Clark Wilson for the debtors.
Red Eagle Mining (TSX:R), a Vancouver, British Columbia-based gold exploration and development corporation with a mine-development team, was placed in receivership on November 21 on application by Orion Fund JV, in its capacity as collateral agent, and Liberty Metals & Mining Holdings, owed approximately $60.0MM (USD). The corporation had been focusing on building shareholder value through discovering and developing gold projects with low costs and low technical risks in Colombia. FTI Consulting was appointed receiver. Counsel is Lawson Lundell for Orion Fund JV and Miller Thomson for the receiver.