N.L. government to gamble up to $3M more to help save St. Lawrence fluorspar mine
CBC
The Newfoundland and Labrador government is preparing to risk more money in a bid to save the insolvent and idled fluorspar mine in St. Lawrence — and the nearly 300 jobs attached to it — from bankruptcy.
An application before the Newfoundland and Labrador Supreme Court on whether a sales process under the Companies' Creditors Arrangement Act can proceed is scheduled to be heard on Friday.
If approved, a court-supervised search for a new buyer or investors will begin, but the process is not cheap.
Two of the major creditors, Bridging Finance Inc., and the provincial government, have agreed to cost-share up to $6.5 million to keep the mine in care and maintenance mode, and to hire accounting and advisory firm Grant Thornton to supervise the sales process.
But a judge must first decide if the plan will proceed.
This last-ditch effort to save the mine from bankruptcy and having its assets liquidated is expected to last until July, but there's hope a new buyer will step forward and revive the operation.
"All of our due diligence leads us to believe this is a viable opportunity," Industry Minister Andrew Parsons told CBC News on Wednesday.
"Everything we've seen leads us to believe that there is a future here for this."
Parsons said potential investors have shown an interest.
Bridging Finance, a privately held investment management firm, is the mine's largest debt holder. It has issued loans totalling $55 million to mine owner Canada Fluorspar.
In early 2017, the provincial government approved a $17-million loan.
The mine stopped production and Grant Thornton was appointed as an interim receiver on Feb. 21, and some 230 of roughly 280 employees were laid off. Court documents blamed financial and logistical problems for the move.
If approved by the court, Parsons said, he believes the latest plan "would secure the financial future for the mine."
Parsons acknowledged that more public money — in the range of $3 million — is being put at risk.
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