Yukon Zinc granted more time, money to restructure
The B.C. Supreme Court has extended stay of proceedings to June 12
Yukon Zinc has been given more time and money to restructure, and maintain the Wolverine mine site.
The B.C. Supreme Court granted the company's request on Friday to further extend the relief granted under creditor protection. It's the second extension granted to Yukon Zinc, but a longer one. The previous one-week extension covered the company until Friday. It now has a stay of proceedings until June 12.
The court also approved the company's request to borrow more money. Its previous court-ordered borrowing limit was $1.5 million; it's now $5 million.
The beleaguered company requested the extra relief to allow it to work on a restructuring plan, and attempt to re-open the Wolverine Mine northeast of Watson Lake.
Yukon Zinc 'temporarily' shut down the Wolverine Mine in December, citing low metal prices and lack of funding. Since then, the mine site has been in care and maintenance mode. Last month, the company was granted creditor protection.
'Delicate environmental condition'
A report from PricewaterhouseCoopers, the court-appointed monitor of Yukon Zinc's creditor protection process, recommmended the B.C. Supreme Court grant Yukon Zinc's latest requests.
It says the higher borrowing limit will allow the company to continue maintaining the mine site.
"The Mine is in a delicate environmental condition at this time and any curtailment of the current care and maintenance could have a significant impact to the area and require government intervention," the report says.
The mine is now flooded and the company needs money to try to de-water it.
The PricewaterhouseCooper report also says extending the stay of proceedings will allow for a more 'orderly' liquidation, if the Yukon Zinc should fail to restructure.
Looking for buyers
Yukon Zinc owes money to hundreds of creditors, but most of its $646 million debt is owed to parent company JinDui Cheng Canada Resource Corporation Limited (JDC Canada), which has a head office in Vancouver.
Court documents show JDC Canada supports Yukon Zinc's attempts to restructure, but the parent company also wants Yukon Zinc to look for investors and buyers for its assets. The B.C. Supreme Court approved a sale and investment solicitation process, overseen by PricewaterhouseCoopers.
Yukon Zinc spent close to $600 million to purchase and develop the Wolverine site. It went into production in early 2012, and lost nearly $200 million over its three years of operation. At its peak, there were about 300 people working on-site at any time. Most have now been laid off, leaving a workforce of just 12 to maintain the site.