The company overseeing the sale process for the insolvent St. Lawrence fluorspar mine has confirmed that potential buyers are preparing final offers to acquire or invest in the idle operation, and a way forward could be revealed from here in the middle of summer.
That’s from Phil Clarke of Grant Thornton, the court-appointed monitor for the sale and investment solicitation process, which is being conducted under the Companies’ Creditors Arrangement Act, or CCAA.
He said a restructuring of Canada Fluorspar Inc. – which will see the mine reactivated – must be completed by July 10.
Otherwise, an asset sell-off could become a reality, and what had been an economic bright spot for the Burin Peninsula could be gone forever.
Mayor Kevin Pittman is hopeful
But St. Lawrence Mayor Kevin Pittman said he was increasingly encouraged; potential investors have been in contact with the city, hoping to set up meetings, he said.
“I’m sure they come with what they want when they come to town, and see what we can do for them, and we want to know what they can do for us as well,” Pittman said.
Canada Fluorspar halted operations in February after the company, saddled with heavy debt and after months of losses, ran out of cash. Almost all of the approximately 280 employees have been laid off, sending an economic shock wave throughout the region.
The company owes nearly $130 million, including $17 million to the provincial government.
There is also a long list of unsecured creditors, including many companies from the Burin Peninsula, Newfoundland and Labrador and across Canada.
The provincial government and another creditor, Bridge Financing, are financing the sale process.
Offers firm until June 12
CFI has received legal protection from its creditors while a restructuring is underway, and this process is now well under way.
Phase 1 was a call for non-binding letters of intent, with a deadline of April 17.
Clarke told CBC News that proposals had been received, but he would not say how many, from whom, or reveal details about how they plan to reactivate the mine and settle the debt situation.
He confirmed that some, but not all, of those proposals have successfully progressed to the next phase, which includes a June 12 deadline to submit final offers to acquire or invest in the mine.
According to court documents, the deadline for the comptroller to select a final offer is June 19. Clarke said the company and secured creditors will have a say in this process.
The deadline for the Supreme Court of Newfoundland and Labrador to authorize any sale is July 10.
“The fact that we received letters of intent before the April deadline gives us hope that the mine will be reactivated and going again,” Pittman said.
The St. Lawrence flour spar deposit has been described as world-class, and markets are on the rise as fluorspar becomes an ingredient in more and more products, including the production of electric vehicles.
So why didn’t the FCI succeed in St. Lawrence?
According to court documents, the problems at the mine were blamed on challenges caused by the COVID-19 pandemic and production issues at the mine and plant.
Pittman said many of the displaced workers found employment as rotational workers in places like Labrador and northern and western Canada.
But, he added, he did not notice an exodus of families.
“So it’s a sign, I think, that they’re also hopeful that this mine is going to work and that they can come back here and work.”
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