The insolvent St Lawrence fluorspar mine, in Newfoundland, has a new owner and could reopen before the end of the year.
Luxembourg-headquartered African Minerals Exploration and Development Funds (AMED Funds), through a newly created subsidiary called Fluorspar Holdings, purchased Canada Fluorspar, the former operator of the St Lawrence mine for C$25-million.
The sale was approved last week by the Newfoundland and Labrador Supreme Court, following a 15-month insolvency process, and was formalised just prior to the official announcement in St Lawrence, on Tuesday.
With the sale in place, the new operator will now engage with employees, contractors and suppliers over the coming months to restart the idled mine.
As a sponsor partner of AMED Funds and the buyer, South African Rudolph de Bruin brings decades of mining experience to Canada Fluorspar.
De Bruin stated that the St Lawrence mine was an important economic driver in the province and that the company was looking forward to reopening the mine by November this year.
“Our aim is not only to bring Canada Fluorspar back into production, but to transform it into a world-class fluorspar mine as part of AMED’s diverse product offering,” he said.
“What we have here in St Lawrence is a world-class deposit. On its own, it may have struggled a bit, but now that we have the advantage of being able to combine our various projects into a coherent unit, makes it easier to market your product and many other benefits.”
He said AMED would reopen the mine in gradual fashion and in partnership with the provincial government and the community.
The provincial government agreed with the buyer to provide up to, but not more than, C$3.785-million toward the costs associated with a water treatment management plan at the site to assist with the restart of the mine. This project is expected to reach into the tens of millions of dollars in expenditure. These funds will help ensure the restart of the mine and the return of jobs and economic activity to the region.
he provincial government will receive close to C$4-million from the proceeds of the sale. This will repay a loan of C$3.25-million, plus interest, that it provided to Canada Fluorspar to sustain its operations during the sales and investment solicitation process that was led by Grant Thornton under the Companies’ Creditors Arrangement Act proceedings in its capacity as the court-appointed Monitor.
The sale closed following months of review and negotiations with several stakeholders.
“The parties worked diligently to create an optimal result for stakeholders, including senior lenders, the DIP lenders, the company (acting through the court-appointed Monitor) and very importantly the local community and the province.
“We understand from the Monitor’s filings with the court that the AMED proposal was materially the best proposal received, and we wish to thank all parties and their representatives for their diligent and very constructive work to help bring this transaction across the finish line,” said Clarity Strategic Advisers founder and managing partner Rahul Suri.
Willem Jacobs, senior MD and head of energy and mining investment banking at Clarity, added that Canada Fluorspar would benefit from AMED’s fluorspar technical knowledge and its sales and distribution network.
AMED Funds has a track record over the last decade of identifying, purchasing and operating diverse mining projects. AMED has more than $1.4-billion in assets under management, which include a significant investment in a South Africa-based fluorspar operation and various other fluorspar projects.
“Our government committed to exploring all reasonable options to help secure a future for the fluorspar mine and its employees. We are pleased that the mine has found a new owner. We look forward to the restart of the mine in St. Lawrence, and to the benefits and jobs that this will bring back to the town and to the broader region in the Burin Peninsula,” commented Industry, Energy and Technology Minister Andrew Parsons.