Cantung mine to close in October

North American Tungsten will temporarily shut down operations at its Cantung mine on the Yukon/N.W.T. border at the end of October.

North American Tungsten will temporarily shut down operations at its Cantung mine on the Yukon/N.W.T. border at the end of October.

In a letter to the Mackenzie Valley Land and Water Board, the company explained that it hopes operations will resume in the summer of 2016, “if economic and market conditions improve significantly.”

North American Tungsten went into creditor protection in June, after revealing it owed $79.5 million to 237 companies.

In July, it permanently laid off 50 employees and borrowed $3 million to keep the mine operating until the end of October.

John Sandrelli, a lawyer representing the mining company, said the mine was planning to shut down this fall, and the closure is happening as expected. The mine will go into care and maintenance at the end of November.

North American Tungsten began to look for buyers for its struggling mine in July. Sandrelli said the company is expecting to hear from interested buyers by the end of September.

When the mine will resume operations, he said, “depends in large part upon the outcome of the sale process.”

So far, few details have been made public about potential buyers or investors, barring one.

At the end of August, three of North American Tungsten’s directors, including its chief executive officer and chief financial officer, announced they were involved with an investment company that may offer to invest in or buy the mine.

CEO Kurt Heikkila, CFO Dennis Lindahl, and director Ron Erickson are all involved with Queenwood Capital Partners, currently one of North American Tungsten’s secured creditors.

Since the announcement, the company’s court-appointed monitor has modified the sale and investment process so that these three directors will not receive copies of any other bids. The monitor will now oversee the process with no input from the three directors, to try and prevent any conflict of interest.

Aside from the sale process, the mining company still has other financial dealings to sort out.

In July, the company received notice from one of its two tungsten customers, Global Tungsten & Powders Corp. (GTP), that it was going to withhold payments of about $1.6 million for shipments of tungsten concentrate. GTP said it was reclaiming money owed to it from a loan issued to North American Tungsten in 2013. At the time, North American Tungsten warned that if the payments were not made, it would likely be unable to make payroll and might not be able to continue operations.

Since then, GTP has been ordered in court to pay the mining company for the shipments. It has done so, but it continues to fight the issue in court. Its next appeal date is set for Wednesday.

In the most recent monitor’s report, it appears that North American Tungsten made $2 million less than expected on tungsten sales between early June and early September. That’s because the mine produced less volume than expected, and because some of the product “did not meet contract specification requirements for the existing customers.”

Contact Maura Forrest at

maura.forrest@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

From Whitehorse to the Whitecaps

Joe Hanson is starting his second season with the Vancouver Whitecaps academy

Mount Lorne Mis-Adventure Trail Race doesn’t miss a step

Blue skies and sunshine for a chilly fall race

Canada Summer Games postponed

Yukon Canada Summer Games athletes will now work on mastering skills in preperation for 2022

Site selection for battery project draws ire of nearby landowners

Yukon Energy is accepting public comments on three possible sites for the project

Taking a closer look at the cosmos

Star gazing party scheduled for Sept. 18

Yukon government releases new guidelines for COVID-19 symptoms and sending children to school

The advice sorts symptoms into three categories: red, yellow and green

Nominations closed in Watson Lake byelection

Four candidates are running for mayor

Baggage screening changes begin

Passengers are asked to arrive earlier than normal in order to accommodate the new temporary system

Yukon Government extends education review

The final report is scheduled for release in March 2021

City hall, briefly

A look at decisions made by Whitehorse city council this week

Lawsuit against Freedom Trails settled

The suit was dismissed with consent of all parties

Tank farm takes another step towards development

OCP designation passes second reading

Climate change strategy targets 30 per cent reduction in territory greenhouse gases by 2030

The strategy includes rebates for electric vehicles but puts off mining targets for two years

Most Read