Judge approves St. Lawrence mine sale process, with province committing up to $3.25M
CBC
There's still hope for the fluorspar mine in St. Lawrence following a hearing in St. John's that saw Newfoundland and Labrador's supreme court approve a multimillion-dollar plan — half of which will be funded with public money — to temporarily secure the mine while a search commences for new owners for the insolvent operation.
It's called a sales and investor solicitation process, or SISP, and it was approved Friday afternoon under the Companies' Creditors Arrangement Act by Justice Alexander MacDonald.
Some of the $6.5 million will be used to pay several dozen workers at the mine until early July to ensure the assets are maintained and protected, while the rest will be used to market the mine to potential investors.
A portion of the financing was approved on Friday, while the remainder will be considered at a follow-up hearing on March 18.
Grant Thornton, which has been acting as the interim receiver since Feb. 21, will oversee the sales process.
The provincial government will contribute up to $3.25 million to the SISP, while the largest creditor, Bridging Finance Inc., will cover the other half.
If this process is unsuccessful, the business will go bankrupt and its assets liquidated, and one of the largest employers on the Burin Peninsula will disappear.
But those involved with Friday's hearing expressed confidence that the mine can survive bankruptcy, and that a new owner can restore the operation to profitability.
But it won't be easy. According to court documents, the company lost $30 million in 2020, and $44 million in 2021.
And the business comes with a lot of debt: nearly $130 million, including $23 million to unsecured creditors.
The mine's troubles were blamed on challenges associated with the COVID-19 pandemic, and production problems at the mine and mill.
In an affidavit to the court, Grant Thornton said an investment of cash to allow for upgrades to the Blue Beach marine terminal, and improvements at the mine and mill, would set the stage for the operation to become profitable.
The fluorspar produced in St. Lawrence is known for its accessibility, high grades, and absence of impurities, and according to Grant Thornton, there has been an interest from prospective new investors.
Fluorspar is an essential mineral to many industries and applications, including lithium ion batteries, solar panels, refrigeration and air conditioners, and glass for smart phones and electronic devices.
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