Potential buyers preparing final bids for St. Lawrence mine, says insolvency monitor
Mayor is hopeful mine will reactivate, saying some companies have requested meetings with town leaders
The firm overseeing the sales process for the insolvent fluorspar mine in St. Lawrence has confirmed that potential buyers are preparing final bids to acquire or invest in the idled operation, and a way forward could be revealed by mid-summer.
That's the word 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. — one that will result in the mine being reactivated — must be completed by July 10.
Otherwise, a liquidation of assets could become a reality, and what had been an economic bright spot for the Burin Peninsula could disappear forever.
Mayor Kevin Pittman is hopeful
But St. Lawrence Mayor Kevin Pittman said he's increasingly encouraged; prospective investors have been in contact with the town, hoping to set up meetings, he said.
"I'm sure they're coming with what they want when they come into town, and seeing 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 following months of losses, ran out of cash. Almost all of the roughly 280 employees were laid off, sending an economic shockwave throughout the region.
The company owes nearly $130 million in debt, including $17 million to the provincial government.
There's also a long list of unsecured creditors, including many businesses on the Burin Peninsula, throughout Newfoundland and Labrador, and across Canada.
The provincial government and another creditor, Bridge Financing, are funding the sales process.
Firm bids due by June 12
CFI has received court protection from its creditors while a restructuring is pursued, and that process is now well underway.
Phase 1 was a call for non-binding letters of intent, with a deadline of April 17.
Clarke told CBC News that proposals were received, but he would not say how many, from whom, or reveal details of how they planned to reactivate the mine and address the debt situation.
He confirmed that some, but not all, of those proposals have successfully moved to the next phase, which includes a June 12 deadline to submit definitive offers to acquire or invest in the mine.
According to court documents, the deadline for selection of a final bid by the monitor is June 19. Clarke said the company and secured creditors will have input into that process.
The deadline for the Supreme Court of Newfoundland and Labrador to authorize any sale is July 10.
"The fact we had letters of intent submitted in the April deadline gives us hope that the mine is going to be reactivated and moving along again," said Pittman.
The St. Lawrence flourspar deposit has been described as world-class, and markets are on an upswing as fluorspar becomes an ingredient in more products, including the production of electric vehicles.
So why wasn't CFI successful in St. Lawrence?
According to court documents, the mine's troubles were blamed on challenges caused by the COVID-19 pandemic and production problems at the mine and mill.
Pittman said many of the displaced workers have found employment as rotational workers in places such as Labrador and northern and western Canada.
But, he added, he hasn't noticed an exodus of families.
"So that's a sign, I'm thinking, that they're hoping as well that this mine is going to work and that they can come back here and work."