With creditors in hot pursuit…

August 14, 2013

A year ago North of 56 commented on a fledgling nickel mine in northern Quebec. Now a raft of suppliers is after $72M in outstanding bills from Canadian Royalties Ltd.

The creditors owed a total of $72M million by the mine include Nunavut Eastern Arctic Shipping, Desgagnés Transarctik Inc., the fuel division of the Fédération des Coopératives du Nouveau-Québec, Laval Fortin Adams, Iglu Construction and Nuvumiut Developments (Ganotec-Nunavumiut and Kiewit-Nunavumiut), which all have links to Nunavik Inuit organizations or individuals. The construction firm Laval Fortin Adams is owed about $14 million, the largest amount of any of the Nunavik-based companies left holding the bill for work on the mine and docking complex. L’Echo Abitibien says another $16.4 million is owed to Construction Promec de Rouyn-Noranda.

After sinking $735 million into infrastructure, Jien Canada Mining Ltd., the Chinese company that took over Canadian Royalties several years ago, said it planned to ramp up production in early 2013, training and hiring more Nunavik workers. The mine company, which expected to reach full production by 2014, was to remain in operation for at least 13 years. On July 19, the Chinese owners of the mine have turned the cash-strapped Nunavik Nickel mine over to a private merchant bank in Toronto called Forbes and Manhattan. The bank is restructuring the project after Jien Canada Mining Ltd. couldn’t get the money it needed to bankroll the project out of China, Les Affaires reported Aug. 13.

A year ago more than 650 people were on site, living in its 428-person main camp and other temporary camps. The Nunavik project is located 20 kilometers south of Xstrata’s Raglan nickel mine. When it reaches full production, Canadian Royalties expected the mine to produce 4,500 metric tons (MT) of ore a day, or about 1.6 million MT a year. To put that in context, Raglan produces 1.3 million MT of ore a year. According to the company’s technical report, the project’s reserves stand at 10,721,000 MT grading 0.97 percent nickel, 1.13 percent copper, 0.05 percent cobalt, 0.10 g/t gold, 0.45 g/t platinum and 1.86 g/t palladium.

Nickel prices have continued to slide from their high point two years ago, losing half their value.

Commentary

The company’s website tells little about what is going on and the company’s plans remain unclear. Tragically, there are some businesses hurting in Quebec from unpaid bills and undoubtedly many people who were hoping for work again in 2013 who are now sitting at home.

Sources

• a)http://www.nunatsiaqonline.ca/stories/article/65674nunavik_mine_owes_72_million_to_creditors_chinese_owners_turn_project_/



• b)http://nickelinvestingnews.com/4596-nunavik-nickel-production-canadian-royalties-quebec-china-jilin-jien.html