Buyer chosen for insolvent St. Lawrence mine, but creditors warned to expect 'substantial loss'

A new buyer has been identified for the insolvent St. Lawrence fluorspar mine, but a long list of creditors, including the provincial government, have been warned to expect very little, or nothing, if the deal is finalized.

And even if the mine is reopened, not all former employees will be eager to return.

"I would have to think about it," Shane SlaneysaidWednesday during a phone interview from a gold mine in Ontario.

Slaneyworked at the fluorspar mine for five years before it closed in February 2022. He returned to rotational work outside Newfoundland and Labrador to provide for his blended family, which includes his partner, Paula, and their five children.

Slaney is happy with his new job as a bulldozer operator at theCt gold mine in northeastern Ontarioand isn't convinced the St. Lawrence mine has a bright future. Asked if he would return to his old job, he replied, "That's a hard qusetion."

A judge has extended bankruptcy protection for Canada Fluorspar Inc. until May 31 to allow time to convert a binding letter of intent by the successful bidder into a formal sales agreement.

Documents filed with the Supreme Court of Newfoundland and Labrador by Grant Thornton, the firm overseeing the insolvency process, show the unidentified bidder intends to restart the mine.

The document also reveals that secured creditors will "suffer a substantial loss," while unsecured creditors, which includes a long list of companies from the Burin Peninsula, "will not recoveranything."

It's the latest development in a tumultuous year for one of the Burin Peninsula's largest private sector employers. Itwent into receivership in late February 2022 after CFI ran out of cash. Prior to its closure, the mine employed roughly 250 people, according to reports from Grant Thornton.

Canada Fluorspar owes roughly $95 million to three secured creditors, nearly $23 million to unsecured creditorsand just under $10 million for capital leases of equipment and machinery.

The Town of St. Lawrence has also been hit hard, with a $460,000 grant in lieu of taxes from CFI going unpaid last year.

While taxes have not increased, Mayor Kevin Pittman said some fees have increased, and spending reductions have been necessary.

The provincial government is a secured creditor, with an outstanding loan of $17 million.The province also cost-shared a $6.5-million injection of cash to keep the mine in care and maintenance modeand to fund the sales process.

Industry and Energy Minister Andrew Parsons was unable to say how much public money might be recovered if the sale proceeds. His focus is seeing the mine reactivatedand the jobs restored, he said.

"The silver lining is that we could be out that money and a closed mine rather than what we have right now," he said. "I want to see a mind that's operational. I want to see people working. And I think the the folks in St. Lawrence would tell you the same thing."

It's estimated that $1.5 million isowed to Burin Peninsula-based companies, with Marystown-based General Auto & Industrial topping the list with receivables of nearly $540,000. The company's owner declined an interview.

Pittman said it could mean trouble for some companies.

"Whether they can continue to survive or whether they can continue to survive with their current staff, I don't know," said Pittman. "It makes a difficult situation for those companies, and of course the smaller the company the tougher this is going to hit them."

Still, leaders like Pittman are expressing cautious optimism about the fate of the mine. That's because hopes were dashed last fall after the sales process collapsed when a successful bidder failed to pay the full deposit amount.

In order to avoid outright bankruptcy, the sales process was restarted, and Grant Thornton receivedsix offers to buy and reopen the mine and two liquidating proposalsby the Jan. 16deadline.

• St. Lawrence, a boom-bust N.L. town, endures another hit as fluorspar mine flames out
• Setback for St. Lawrence fluorspar mine sale as buyer fails to pay full deposit

The preferred bidder signed a binding letter of intent on Feb. 13, and the court agreed to extend bankruptcy protection until May 31.

Grant Thornton describes the successful bid as the "best offer" because it avoids a sell-off of the assets and allows for the mine to restart,preserves an undetermined number of jobs, and presents an opportunity for suppliers to do future business with the operation.

The best-case scenario, said the mayor, is that a reputable company with deep pockets takes over the mine and can make it a success.

"We're doing what we can to get this source of employment back into town and get the people back to work and, more than anything, getour families back together again, not having people have to go away to work," said Pittman.

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