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.
Basin Mine Limited Partnership, a limited partnership ultimately owned by Arthon Industries, filed an NOI on October 3. In 2015, the partnership acquired, through the CCAA proceedings of Coalmont Energy Corp, the mining permit to develop and operate an open pit coal mine near Coalmont, British Columbia. The mine was anticipated to produce approximately 500.0M tonnes of thermal coal per year. Full scale production has never taken place though, due primarily to the price of thermal coal dropping well below the break-even point for the mine. The mine currently does not generate any revenue and incurs costs of approximately $60.0M per month to keep it under care and maintenance. In early 2016, Callidus Capital, the partnership's senior secured lender owed approximately $63.3MM, advised that it wanted the partnership to sell its assets, primarily to stop the mine's ongoing care and maintenance costs, which it funded. The partnership, with the assistance of Ritchie Bros and MNP Corporate Finance, commenced a sales process that ultimately produced one offer from Pioneer Sand and Gravel (Pioneer). In order to convey the assets to Pioneer free and clear of encumbrances and charges, the transaction will be completed under a formal insolvency process. EY is the proposal trustee. Counsel is Cassels Brock for the company and BLG for Callidus.
Sage Gold (TSXV:SGX), a Toronto, Ontario-based near term producer and gold exploration company with two principal assets respectively located in Timmins and Thunder Bay, was placed in interim receivership on July 13 on application by CRH Funding II Pte, owed approximately $38.8MM. On July 10, the company announced that for the quarter ending in March, it had suffered a net loss of approximately $3.0MM. The company is facing severe liquidity and can no longer make payments to its contract mine manager, Richie Services, who is owed over $1.4MM. In addition, the two key suppliers that the company requires for its reporting to the Ministry of Environment have ceased to provide information to the company. The purpose of the proposed receivership proceedings is to secure the company's assets, property and undertakings (the "Property"); complete the process of placing its mines on care and maintenance; and for the receiver to realize on the Property. Deloitte was appointed interim receiver. Stikeman Elliot is counsel to the applicant.
Purcell Basin Minerals, Bul River Mineral Corporation, Gallowai Metal Mining, Grand Mineral Corporation and Stanfield Mining Group, Cranbrook, British Columbia-based developers of mineral resources and a mining property near the Rocky Mountains, filed for protection under the CCAA on May 29. Purcell had acquired the mine and the other petitioners in 2014 by way of a court-sanctioned plan of arrangement in the Stanfield CCAA proceedings. A year later, Brendan MacMillan, who was the sole director and officer of Purcell at that time, took some steps to further the development of the mine. However, he also caused the company to, among other things, secure his claimed compensation and issue three million shares to him. In 2016, two of Purcell's shareholders successfully challenged these transactions as being oppressive. Since the implementation of the Stanfield plan of arrangement, Purcell's business has been hampered by the oppressive actions of MacMillan and by litigation involving Purcell, its lenders and its shareholders. The company currently has no cash on hand, no income and no inflow of equity capital. The company will use the CCAA proceedings to, among other things, conduct a claims process to determine the validity and status of all creditors' claims, restructure its secured debt and seek new capital. MNP was appointed monitor. Counsel is Gowling WLG for the companies and Lawson Lundell for the monitor.