With 260 jobs at risk, receiver appointed to stave off Canada Fluorspar bankruptcy

The future of a major employer on the Burin Peninsula is in doubt, as creditors are scrambling to keep Canada Fluorspar from shutting down.

The company's mining operation in St. Lawrence employs 260 people, who are at risk of losing their jobs.

There are provincial tax dollars at stake as well. In 2017, the government issued a $17-million repayable loan to Canada Fluorspar that matures at the end of this year.

Chief Justice Raymond Whalen issued an order at Newfoundland and Labrador Supreme Courton Tuesday appointing an interim receiver for Canada Fluorspar.

According to court documents, that interim receiver will use cash on hand to keep the company running,while options are pursued to restructure Canada Fluorsparand avoid bankruptcy.

Canada Fluorspar did not respond to requests for comment Tuesday.

In a statement, Industry Minister Andrew Parsons said the province will offer support to affected employees. Parsons said officials are in contact with all relevant parties, including discussions with the company and receiver.

St. Lawrence Mayor Kevin Pittman told CBC News the mine has an economic impact on the entire Burin Peninsula, and job losses would be "devastating."

He said town officials are seeking more information on the situation.

"We really feel for these families who are going to be hurting through all this, with the loss of employment and the loss of money coming into their homes," Pittman said.

Details of financial woes

Court filings outline the company's financial situation.

Bridging Finance a privately held investment management firm has issued loans totalling $55 million to Canada Fluorspar.

The maturity date was extended to the end of March, on the understanding the loanswould be refinanced elsewhere and repaid in full.

HSBC has issued loans and other credit instruments totalling nearly $24 million, and the province chipped in that $17 million.

Canada Fluorspar is 100 per cent owned by Golden Gate Capital, which has invested about $238 million US in equity financing since acquiring the company in 2014.

According to the application to appoint an interim receiver, production of fluorspar concentrate in St. Lawrence started to increase in the first half of 2021, with new production records achieved in May and June of that year.

But court documents say Canada Fluorspar's 2021-22 sales "have been constrained by operational and COVID-19 related matters that have slowed production in recent months."

In the past, Golden Gate Capital has covered Canada Fluorspar's cash shortfalls from operations. But in late January, it decided not to invest any additional funds.

The application does hold out a glimmer of hope for the future, from the major creditor.

"While [Canada Fluorspar]has experienced significant financial problems in recent months, Bridging believes there may be a viable path forward," the court filings note.

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