North

Yukon Zinc accused of concealing $4.4M in San Francisco bank

Yukon Zinc, operators of the territory's cash-strapped Wolverine Mine, have been given more time to restructure debt after a court-appointed monitor found $4.4 million dollars deliberately concealed in a California bank.

Cash from prepaid sales held in a 'suspense' account in San Francisco bank

Yukon Zinc's Wolverine Mine. Yukon Zinc still owes over $646 million to hundreds creditors. (Yukon Zinc)

Yukon Zinc, operator of the territory's now-closed Wolverine Mine, appear to have deliberately concealed $4.4 million dollars in a San Francisco bank account, according to documents presented in British Columbia Supreme Court June 25. 

The Chinese-backed company has been under court ordered creditor protection since closing the Wolverine Mine, located north of Watson Lake, in January.

Professional services network PricewaterhouseCoopers, a monitor appointed by the court, conducted the investigation that revealed the concealed money, say the $4.4 million was held in a 'suspense' account, and comes from a prepaid sale of zinc concentrates that was never completed to Shaanix Zinc, a Chinese company. 

PricewaterhouseCoopers say "the company appears to have deliberately concealed from the monitor the existence of the funds, and its efforts to return the money to Shaanix Zinc," according to submissions make to the court.

Senior management of Yukon Zinc directed corporate staff on April 14 not to advise the monitor, as it would "cause much trouble," according to the court documents.

The money has since been transferred to the company's account at the Bank of Montreal in Vancouver. 

Creditor protection extended again

Meanwhile, the BC Supreme Court has again extended Yukon Zinc's creditor protection until August 14 to allow the company to continue work on its restructuring plan.

A court order also allows the company to pay a one-time bonus of $90,000 to the 11 workers currently onsite at the Wolverine Mine. The workers are performing necessary care and maintenance and the bonus is expected to help with temporary retention of the employees.

Yukon Zinc owes more than $646 million to hundreds of creditors. Most of that debt — about $600 million — is claimed by its parent company, JinDui Cheng Canada Resource Corporation Limited, which has its head office in Vancouver.

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