Yukon Zinc has decided to restructure its Wolverine mine project, and will file a plan to deal with its creditors by the end of this week.
The company confirmed its decision to restructure in a letter to the monitor overseeing its creditor protection proceedings on July 31.
The decision makes it “less likely” that the mine will be sold, according to Kibben Jackson, a lawyer for the company.
Yukon Zinc must present a plan of arrangement to its creditors by August 14. That plan will likely offer dividends to the company’s unsecured creditors, worth a fraction of the debt owed to each, said David Gruber, a lawyer for one of the creditors, in a previous interview with the News.
Jackson said the creditors will likely vote on the plan in September. If they approve it, the plan will be implemented in October, and the mine will not be sold.
A new report from the monitor provides an updated list of the debt owed to each of Yukon Zinc’s 310 creditors. The company owes a total of $654 million. The vast majority of that – $602 million – is owed to its Chinese parent company, Jinduicheng Canada Resource Corporation.
Another $20 million is owed to Shaanxi Zinc Industry Co., which the report describes as a “cousin” to Yukon Zinc.
All but nine of the creditors are unsecured, meaning they are not guaranteed any of the money owed to them.
Yukon Zinc was granted creditor protection in March, after the Wolverine Mine shut down in January due to low mineral prices.
Australian mining company MinQuest went public last month with a bid to buy the mine, if it does end up being sold. No details of the offer have been disclosed.