Fifty-two Yukon firms are owed $4.3 million
The Yukon Zinc Corp. received court protection last Friday from creditors while it advances a restructuring proposal.
The Yukon Zinc Corp. received court protection last Friday from creditors while it advances a restructuring proposal.
The Chinese owners of the Wolverine Mine are in B.C. Supreme Court today seeking approval of an interim financing arrangement to carry the company through to July 31, according to official documents of the court-appointed monitor, PricewaterhouseCoopers.
In the meantime, companies owed money are required by court order to continue supplying the mine, though from here on, the court is guaranteeing payment for service and supplies provided beyond March 13.
Yukon Zinc owes a total of $647 million, of which $595 million is owed to its Chinese parent company headquartered in Vancouver, according to the documents.
There are 52 Yukon companies owed a total of $4.3 million.
The largest debt of $2.2 million is owed to AFD Petroleum of Whitehorse while the smallest debt of $272 is owed to Jarand Building Supplies of Watson Lake.
Most of the debts are in the thousands, many in the tens of thousands, and a handful in the hundreds of thousands, such as $541,458 owed to P.S. Sidhu Trucking, the $395,393 to Kal Tire and the $127,728 owed to Alkan Air, all of Whitehorse.
MacPherson Rentals on Copper Road, for instance, is owed $40,563.
One of the primary issues facing the company is its inability to cover the cost of maintaining the mine site to the standard approved by the Yukon government in the Temporary Closure Plan it signed off on for the Wolverine Mine.
The company is currently in discussions with the government to see how it can adjust the closure plan to bring down the cost, the documents note.
Energy, Mines and Resources Minister Scott Kent was unavailable this morning to comment on the changes being sought by the company, as were other department officials.
Yukon Zinc representatives were also unavailable for comment this morning.
Under the interim financing proposal, Yukon Zinc would borrow $8 million from a lending institute it already has lined up.
Of the $8 million, $6.9 million would be required to carry operations through to July 31.
Yukon Zinc began production in 2010 and maintained a payroll list of approximately 150 employees. It ceased operations on Jan. 21, citing a depressed commodity market.
At that time, the company announced it would decide within the next few months whether to recommence operations or prolong the closure, depending on the mineral markets.
The company is currently maintaining a staff of 12 at the mine site and 13 at its head office in Vancouver, says the report by PricewaterhouseCoopers.
The report also notes that Yukon Zinc’s parent company has invested in excess of $500 million in the Wolverine Mine.
Yukon Zinc had so far deposited $7.7 million for its reclamation security, but is behind by $800,000.
Since taking over the responsibility for mining in the territory from the federal government on April 1, 2003, the Yukon has implemented a requirement that companies must post security equivalent to the cost of permanently closing the mine.
The amount of security required is updated on a regular basis, to keep pace with the expansion of the mine and additional costs associated with permanent closure.
The Minto Mine, for instance, currently has a security deposit in excess of $42 million which continues to increase as the mine expands.
Yukon Zinc was current with its security requirements up until Oct. 31, 2014, when it missed a regularly scheduled payment of $350,000, according to government records.
The company missed another scheduled security payment on Jan. 31 in the amount $450,000.
The monitor’s report filed Tuesday by PricewaterhouseCoopers indicates it has reviewed various documents pertaining to the assets held by Yukon Zinc, from moveable equipment to mineral reserves.
One assessment report in particular said last month the value of the mine is estimated to be very significant.
PricewaterhouseCoopers noted it has not had the time to comment on how reasonable that assessment report is, and at this time does not have its own independent assessment on the value of the Wolverine Mine.
The Yukon Zinc Corp. and its Wolverine asset were purchased in 2008 by Jinduicheng XiSE Canada Co. Ltd.
That company was formed by two large international Chinese companies – Jinduicheng Molybdenum Group Co. Ltd. and Northwest Nonferrous International Investment Company Ltd.
Comments (23)
Up 1 Down 0
Yukon Foleys on Mar 28, 2015 at 9:31 pm
@Josey Wales. Yukon Zinc was off of the YEC grid and generated their own electricity from their powerhouse. A large part of the money owed to AFD is from power generation costs (diesel).
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Josey Wales on Mar 26, 2015 at 12:18 am
I wonder if they paid their hydro bill. Seems I got a whole $160 in "arrears" and MUST now HAVE a "security deposit" equal to my deadbeat number to keep the lights on.
Why don't we update our plates on our cages to more accurately "represent" mining here these days.
As the ol' guy with the pan? He cannot make near enough of a mess to keep shareholders happy.
OM F G...am I turning into a hippy?
Naaaaaa...just getting tired of the SOP bulls**t.
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Wilf Carter Critical Ball on Mar 23, 2015 at 4:14 pm
Good one crystal ball, but look at the oil assets that Chinese also had to sell to make the nex deal plus parts of nex went to other companies. My sources of information are from in the system.
I am talking mining only which is a big part of their investment in Canada $14B If you look at all the investment from China in real estate, private business, it is more like $40 to $60b but nobody really knows except for the Chinese government which tracks the information.
Crystal ball, you seem to be angry when you wrote that piece but at least I got your attention.
By the way, I have a learning disability which makes it hard for me to write properly as Rhein understands now.
Need to relax crystal ball because you might break your crystal ball of anger.
Have a good day and don't believe everything you read in the paper or reports without having a source that is tested.
I have had meetings with Chinese people who manage the Chinese investment Canada.
I have also worked with and for companies based in Europe and the Middle east.
All these foreign deals are not what people think are the true facts behind the deal.
I worked on large investments coming into Canada from the middle east into Halifax real estate.
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Stu Summer on Mar 23, 2015 at 11:44 am
This happens all over the world and it's sad that so many Yukon companies are owed money by this company. It's good that the government has most of the money required to clean up the mine site.
There is a tourism delegation promoting Yukon to China which may be the thing of the future with respect to providing jobs and income for Yukoners.
There is a lesson here which we continually have to learn. Mining is boom and bust and the government promotes companies that often let us down.
Up 5 Down 0
Get your crystal ball cleaned wilf on Mar 22, 2015 at 7:23 pm
Wilf, you better get a new crystal ball because China paid $15.1 billion for Nexen alone. In the year 2012, China invested a total of $21.5 billion in Canada, including the Nexen deal.
Canada has a $30 billion a year trade deficit with China, yes you read that correctly, and Harper's idea is to get that money back into Canada by selling Canada to China. In other words, the yearly target for purchases of Canada by China should be in the neighbourhood of $30 billion. And it was in fact 21.5 billion in 2012.
To say China only owns $14 billion of Canada is way off the mark. That sounds like a single year's purchases.
"Supporters of the Canada-China FIPA say Canada needs a deal like this with China because we are running a $30-billion-a year trade deficit with the country. To get our money back, we need Chinese investment"
"estimated $25 billion that China poured into Canada in 2012, BMO economist Christy Chen told The Huffington Post Canada. The Nexen deal is worth $15.1 billion alone"
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Wilf Carter It will be interesting to see what the Chinese do on Mar 22, 2015 at 11:13 am
The Prime Minister has limited Chinese investment in Canada because of government owned businesses. According to my sources the Chinese has $14 billion dollars invested Canada mostly in the west and north.
It will be interesting going forward.
I really like to see more Canadian money invested in our projects.
The Wolverine mine was not a good project because of the soil structure making it costly to mine and less competitive than other mines.. I was told that by a very experienced mining person with many years in the mining industry.
I may be totally wrong but I think the Chinese will pay their bills. To the suppliers don't negotiate a settlement on your bills because this is a government owned company.
Up 36 Down 1
QC on Mar 20, 2015 at 6:29 pm
"$595 million is owed to its Chinese parent company headquartered in Vancouver"
Isn't this called an investment rather than a loan? Why is the parent company even listed as a creditor?
Up 21 Down 9
Ron on Mar 20, 2015 at 2:52 pm
@Wayne I am not defending the company as they have made many mistakes. Their biggest mistake was buying the property from a publicly traded "Canadian" company and their band of promoters who are still playing in the Yukon. The Chinese were told it was a World Class deposit and it was far less than that. Ground conditions were terrible causing huge increases in mining costs as well the grades were much lower and the overall ore body much smaller. The huge drop in commodity prices over the last few years haven't helped either. Look into the history of the project. Lots of players made lots of money, just not the Chinese who are taking the brunt of the criticism. I am sure they had not planned on losing $650M.
Up 34 Down 8
Wayne on Mar 20, 2015 at 2:36 pm
@Ron
With all due respect only an idiot would defend this organization. Our lame regulations allowed them to set up shop, pillage the land, scoop the cream off the top and walk away. The $647 million owing in debt plus what ever resources they actually exported would put this shell game in the neighbourhood of a billion dollars?
And you defend this? How??
Up 45 Down 1
Groucho d'North on Mar 20, 2015 at 2:10 pm
Harken back to when Curragh Resources caved in and shut down the Faro mine. Clifford Frame worked like hell to get the NDP government of the day to permit him to get the stock pile of ore to market in Skagway. They even increased the axle weight limit on the highways to help move it out of reach faster. That ore pile was the collateral against outstanding debts our local supply service sector is owed, and is also why there is the rider charge still on our electrical bills each month. I hope history will not repeat and Yukoners don’t get stuck with the dirty end of the stick once more. Government's first duty is to protect Yukoners from more flim flam games.
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Chinese government can't pay their bills? on Mar 20, 2015 at 12:39 pm
You do realize that the chinese government is the majority shareholder in this mine, right? Ya, they are pretty broke. Can't expect China to pay their bills. I am sure they are losing a lot of sleep trying to re-organize to find the money to pay up in the Yukon.
They will sit on these resources as long as they want, until they need them back in china. Zinc prices are at an average right now, so this claim that the price of zinc has dropped is a bit of a stretch.
Normally I would go post all the links to foot note what I have said, but I've done this in past posts on the wolverine mine so just do a google yourself. Okay, here's a start, http://www.yukonzinc.com/en/company_index.cfm
Wolverine is owned by Yukon Zinc which is owned by Jinduicheng Canada Resources Corporation which is owned by Jinduicheng Molybdenum Group Ltd.
which is owned by the Chinese government.
Just a reminder of how it works with the Conservative Party of Canada/Yukon Party's favourite partner in 'unlocking Canada's resource wealth'.
Up 16 Down 12
Ron on Mar 20, 2015 at 12:19 pm
Actually most of the YT companies you state are owed money have only branch offices in YT mostly to supply the resource industry. If you subtract these the actual $$ owed to Yukon owned and operated companies is a fraction of what is stated...AFD Petroleum (Edmonton), Eecol (Langley BC), Finning (Edmonton/Vancouver), Guillevin (Montreal), Inland Kenworth - Parker Pacific (Burnaby BC), Kal Tire (Vernon BC), Orica (Australia), Sandvik (Sweden)
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north_of_60 on Mar 20, 2015 at 12:06 pm
This is why hard-rock mining is no real lasting benefit for the Yukon. They make a mess then leave debts and cleanup for others to deal with. It costs Canadians more than it ever brings in while irreparably damaging our land.
Another example is how the road south from Minto has rapidly degraded with the ore truck traffic and the government has done little or nothing to fix it. Mining only benefits a select few and the rest of us pay for it.
Up 23 Down 27
Ron on Mar 20, 2015 at 11:04 am
4.3 mil on the 100's of millions spent in the Yukon. Don't worry the over charging of supplies by Whitehorse companies has covered this many times over. Maybe The Yukon should just go back to be solely dependent on Federal transfer payments. Let the rest of the provinces and territories in Canada foot the bill.
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Salar on Mar 20, 2015 at 10:06 am
Yep....the too many gov workers in the Yukon and greenies messed this up....yep....that and commodity prices and foreign investors who don't care about anything but money.
Healthy bench to rest your future on for sure that mining....yep
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Home and Native Land on Mar 20, 2015 at 8:26 am
What an utter and complete joke mining companies are in Yukon! I am not talking the vast majority of mom and pop placer operations, which for the most part are good corporate citizens. It is these outfits from outside that come here, rape our land, leave a mess and usually a lot of debt. If you could follow the money there will be a few (upper management, board of directors) that will get theirs (pay outs) before the company (usually numbered so you can't actually go after a individual) goes bankrupt.
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Not all Lost on Mar 20, 2015 at 8:14 am
At least a bunch of senior people in the Dept of Ec Dev got to travel to China on numerous occasions while courting these Chinese companies. All that airfare, etc. must have contributed greatly to the economy. Oh yeah, let's keep doing this! What a great return on our Yukon tax dollar.
Up 45 Down 4
Sure Whatever on Mar 20, 2015 at 6:52 am
Gee, what a surprise.
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YTer on Mar 19, 2015 at 9:51 pm
I know a lot of the local companies who got burned by Cash Minerals in Elsa have been pretty gun shy as a result, and kept Wolverine on a pretty short leash. But are we shocked? No.
Maybe they could send the bills to the Yukon Party?
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ProScience Greenie on Mar 19, 2015 at 8:08 pm
Boom or bust? Our government and the opposition parties should be working on keeping more of the boom and less of the bust. We need lots more of these jobs that pay as good as a government wage or better. Let's hope all the Yukon workers affected can get back on their feet as soon as possible and that we do not see any layoffs from the Yukon companies owed money.
Up 22 Down 8
June Jackson on Mar 19, 2015 at 8:01 pm
Did no one learn anything from Cypress Anvil? How on earth does a business let another business get into them for 10's of thousands of dollars? No one requested a credit deposit? They just kept paying and paying and paying for someone elses supplies and materials? You can't get into Yukon Electric for 200. bucks. Why bother getting closure funds and agreements when you can just call a meeting and adjust the agreement?
"One of the primary issues facing the company is its inability to cover the cost of maintaining the mine site to the standard approved by the Yukon government in the Temporary Closure Plan it signed off on for the Wolverine Mine.
The company is currently in discussions with the government to see how it can adjust the closure plan to bring down the cost, the documents note."
This is just the start, before its over taxpayers will be paying for the entire thing..Zinc will walk away and taxpayers will be covering the closure costs and the reclamation costs. All those businesses who were so greedy they thought they wouldn't get burned? We'll probably have to pay them too.
Up 67 Down 9
Dave on Mar 19, 2015 at 4:20 pm
The Yukon
Boom, Bust, Boom, Bust. It never ends, the faces and company names just change each time.
Up 65 Down 22
Worf on Mar 19, 2015 at 3:02 pm
Look how good mining is for the economy!