Court-ordered protection for mine follows 80 layoffs
North American Tungsten and its Cantung Mine received court protection from creditors Tuesday while it attempts to restructure its financing.
North American Tungsten and its Cantung Mine received court protection from creditors Tuesday while it attempts to restructure its financing.
The British Columbia Supreme Court issued the month-long protection order Tuesday to allow the company and the court-appointed monitor time to develop options for refinancing.
North American Tungsten and the monitor are scheduled to report back to court on July 8.
The company maintains market conditions, a lower grade ore body and recent operational issues at the mine site have created a situation where it does not have the money to service outstanding debts.
It does, however, believe that it can continue operations while under court protection.
“NATC has implemented strict cash conservation and cost reduction plan to attempt to maintain operations,” read the court documents provided in support of its request for protection.
“Nevertheless, NATC is unable to meet its financial obligations as they become due and is accordingly insolvent.”
The Cantung Mine is located along the Yukon-N.W.T. border just inside the N.W.T., though the only road access is through the Yukon and a good number of Yukoners are employed at the mine.
Several Yukon companies are on the list of unsecured creditors, including Kal Tire, which is owed $303,000.
North American Tungsten is the second mine employing Yukoners to go under court protection in the last three months.
Last January, the Yukon Zinc Corp. suspended operations at its Wolverine Mine southeast of Ross River. It sought and received court protection in March.
Yukon Zinc is scheduled to be in court Friday to report on attempts to sell the mine or restructure. A statement from the company in mid-April indicated interest from potential buyers was high.
The court order for North American Tungsten prevents any creditors from taking legal action to collect outstanding debts while the company is under court protection.
The order also prohibits regular suppliers from discontinuing services, though it does allow those suppliers to demand payment on delivery for any goods and supplies provided while North American Tungsten is under protection.
Last week, the company announced short-term layoffs of some 80 employees associated with mining operations.
Each of the employees will miss one, three-week rotation. Operations of the mill will continue, the company said.
In the six months ending March 31, North American Tungsten lost $6.6 million, say court documents.
It owes a total of $79.5 million, the majority of which is owed to 22 major companies which are secured through rights to assets, such as the company’s Cantung Mine and undeveloped Mactung property.
Court documents indicate 215 smaller service and supply companies are owed $13.6 million.
Of the 215, 25 are Yukon companies owed a total of approximately $560,000.
Outstanding debts to Yukon companies range from a high of $303,000 owed to Kal Tire to a low of $111 owed to the Big Horn Hotel in Watson Lake.
The second-largest debt of $94,000 is owed to Alkan Air, Tetra Tech EBA Inc. is owed $61,000 and Trans North Helicopters is owed $34,000.
All other debts to Yukon companies range from several hundred to several thousand but all are below $10,000.
Court documents indicated one of the major issues facing North American Tungsten is the amount of reclamation security required for its newly amended water licence.
The water board of the Northwest Territories has recommended to the N.W.T. government the amount of security on hand should be $30 million, or $19 million more than the $11 million currently posted.
North American Tungsten, on the other hand, believes $15 million should be sufficient security, based on a recent assessment by an engineering firm.
The company is negotiating with the government.
Comments (16)
Up 6 Down 0
ABH on Jun 15, 2015 at 12:59 pm
I wonder how EI is going to handle the laid-off employees. They're probably not eligible, from what I understand of the changes.
Up 2 Down 1
Yukon Jack on Jun 15, 2015 at 12:13 pm
"Duely Noted" What structure would that be? Looks like a lot of lawsuits going on which stop mining from doing business. The YP also decided not to allow any mining in the Whitehorse trough. That's really helpful huh.
Up 13 Down 7
I do have experience in the following Yter and Yukon 56 on Jun 14, 2015 at 5:15 pm
Executive Director of Economic Development agency.
Senior Business Development Adviser to the Yukon Government which included mining, oil and gas development, infrastructure, manufacturing etc.
I was a Manager of Revenue Requirements for Northwestel.
Director for First Nations in the Yukon.
Chief Administrative Officer of a municipality.
I was senior project manager on project in Alberta, BC, Quebec, and Nova Scotia and in the US, such as Denver, Los Angeles.
Project involved with were, hospitals, health care seniors, affordable housing, land development, social housing, shopping centers office towers etc.
I also worked for a group out of Iran and Sadia.
Yter and Yukon 56 show Yukoners your background, or do you have one or just like to talk and say nothing positive or add value!
Far as Wolverine Mine goes, I met GM and his wife at the mine.
What else would you like to know?
Thanks for asking!
Wilf Carter
Up 7 Down 1
YTer on Jun 13, 2015 at 12:39 pm
Anotheryukoner
And I hope they continue to be able to pay you.
Interesting that in the likes and dislikes of my first comment, there seems to be more people disliking my concern for the employees than agreeing with me. Wonder if KalTire is happy that they won't be getting paid anytime soon?
Wilf, Wilf, Wilf. Now you are a mining expert meeting with mining company executives. Your resume keeps growing day by day.
And BTW, I have never once voted for the NDP.
Up 12 Down 18
Yukon 56 on Jun 12, 2015 at 6:50 pm
That Wilf Carter is on top of everything. I think he is wearing thin on all
Up 33 Down 17
Duely noted on Jun 12, 2015 at 3:21 pm
Markets are down. The YP put in place a structure that mining could do business in the Yukon, that's it. You have NDLP trying to stop all resource development in the Yukon and make the Yukon a park where there is no economy and our kids have to leave.
Up 17 Down 30
You can't have it both ways on Jun 12, 2015 at 11:42 am
"Markets in the tank" Oh, so you are saying that all of the boom periods weren't due to the politics of the Yukon Party? Duely noted.
Up 18 Down 2
Bobby Bitman on Jun 11, 2015 at 4:45 pm
My questions: are they owned by the Chinese government? (doesn't look like it) Do they hire people from the NWT and Yukon whenever possible, and then Canadians when they can't find the people they need? Do they pay good wages? Do they look out for the ecology of the area they work in? Do they pay royalties for what they take and sell?
If the answers to these questions are on the correct side of the equation, they have my support and let's get them up and running again if at all possible. I don't like the boom-bust of the resource industry, but if the net benefits are there it's worth supporting this industry.
Up 27 Down 14
Yter supports the new NDLP in the Yukon on Jun 11, 2015 at 12:48 pm
Yter supports the new NDLP in the Yukon and like Liz and Sandy talk lots but say nothing of any value that drives investment away.
Up 30 Down 10
Markets in the tank on Jun 11, 2015 at 11:48 am
Markets in the tank and will come back when market demand moves back up again. LIz and Sandy you get it, right?
Up 25 Down 11
As I stared in my letter to the Star on mining on Jun 11, 2015 at 11:46 am
It was coming that North America Tungsten had to pull back.
People I have talked to were totally surprised they kept going as long as they did.
When I met with senior officials of North America they were very concerned about their employees.
When we get comments from Yter it does not help anything but put mud in the employees faces.
Wilf Carter
Up 46 Down 1
another yukoner on Jun 10, 2015 at 6:29 pm
@ YTer As one of those employees I assure you Cantung has never missed paying me and is doing their best to have everyone back at work. They have also invested a lot in updating their reclamation by adding water treatment plant and changing methods for dealing with tailings. Better for the environment and for product return. It will be the NWT that shuts this small profits mine down.
Up 16 Down 0
Yukon 56 on Jun 10, 2015 at 6:05 pm
YTer the issue is that there are Yukoners working in the NWT jurisdiction. I hope if Mactung comes to fruition it will be in the Yukon. As it sits it is on the border
Up 27 Down 7
ProScience Greenie on Jun 10, 2015 at 6:01 pm
Perhaps YTer the Yukon Opposition and our government union could also throw some cash at these miners. Or at the very least give them a little moral support and sympathy.
I sure do miss our parent's NDP that would always support miners and other hard working resource sector workers. Pier's and Tony, you guys still out there? Your party has lost it's way.
Up 34 Down 2
ProScience Greenie on Jun 10, 2015 at 5:57 pm
More than once Cantung has had temporary layoffs and after a few months was up and running again. It has proven to be a better company than most. I know it is very unpopular to support progressive small mining companies and workers that are hard rock miners but let's hope things turn around as soon as possible and all are back to work again.
Up 36 Down 59
YTer on Jun 10, 2015 at 4:27 pm
"It does, however, believe that it can continue operations while under court protection."
I love this statement. I bet the Yukoners laid off could continue their own lives if they didn't have to pay their mortgage, their car payments, food, kids clothes etc. That, however, is not a luxury afforded to them. Maybe the Chamber of Mines or the Yukon Party could throw some cash at them to help get by.