Yukon Zinc announces meeting in Whitehorse

Yukon Zinc has announced it will hold a town-hall meeting in Whitehorse this coming Monday to discuss the details of its restructuring plan. 

Yukon Zinc has announced it will hold a town-hall meeting in Whitehorse this coming Monday to discuss the details of its restructuring plan.

The plan, approved by the B.C. Supreme Court on Aug. 14, would pay out the full debt to anyone owed less than $5,000, and would offer either $5,000 or up to 11.5 cents on the dollar to anyone owed more.

The meeting falls two days before the company’s creditors must vote on the plan.

But it also takes place just hours before many of the creditors will have to decide whether or not they support the restructuring. According to Yukon Zinc’s plan, creditors owed more than $5,000 have been offered 7.5 cents on the dollar. But they can also choose to assign their debt to Jinduicheng Canada Resources Corp., Yukon Zinc’s parent company and the plan’s financier, for an extra four cents on the dollar.

Any creditors who decide to do that are assumed to have voted for the plan, and are therefore ineligible to vote on Sept. 2.

And any creditors who decide to do that have to deliver their acceptance to the company’s court-appointed monitor by 5 p.m. on Monday. The town-hall meeting starts at 1:30 p.m. that day.

Kibben Jackson, a lawyer for Yukon Zinc, said he doesn’t feel the meeting is particularly last-minute.

“By that time, hopefully most people will have made up their minds,” he said. “It’s just an opportunity for people to ask questions.”

But David Gruber, a lawyer for one of the creditors, said having a meeting right before the deadline is “unusual.”

He said it’s also uncommon for restructuring plans to include an assignment offer like the four extra cents being offered by JDC Canada. He believes that offer was “an extra incentive for an affirmative vote.”

In essence, if creditors take the extra four cents, they lose the right to vote against the plan. If they don’t take the four cents because they want the chance to vote against the plan, they get stuck with 7.5 cents on the dollar if the plan is voted in.

It’s still unclear why the eleventh-hour meeting has been called. But it could be that Yukon Zinc has concerns that creditors may vote against the plan.

Gruber said creditors typically will vote in favour of a restructuring plan when it’s recommended by a court-appointed monitor, as this one is. “When they don’t, it’s usually because either they would do better in a liquidation…. or they would do better with some other deal,” he said.

In this case, if Yukon Zinc’s plan fails, the other deal on the table is Australian mining company MinQuest’s bid to buy the Wolverine mine.

MinQuest’s managing director, Jeremy Read, recently told the News that the company wants to reopen the mine within six months if given the opportunity to buy it.

But MinQuest has yet to confirm that it has sufficient financing to purchase Wolverine. Read estimates it will need $20 million to buy the mine, and another $6 or $8 million to put it back into production.

Read said he is in negotiations with two groups that may want to invest, but they will likely require a site visit before making a final decision.

Read said MinQuest has not been invited to attend Monday’s meeting.

Earlier this week, NDP MLA Jim Tredger questioned whether Yukon Zinc’s plan is fair to creditors.

“There is a mess. And it’s being left, and Yukoners are footing the bill for that,” he said. “Local businesses should be paid. They’re key and central to what happens in our communities.”

Tredger also pointed a finger at the Yukon Party, saying the government needs to do more to protect local businesses and be less of a “cheerleader” for the mining industry.

Scott Kent, minister of Energy, Mines and Resources, declined an interview while the restructuring proceedings are underway. The town-hall meeting will take place at 1:30 p.m. on Monday, Aug. 31 at the Westmark Whitehorse Hotel.

Contact Maura Forrest at