Yukon Zinc’s creditors accept debt payment plan

Yukon Zinc's creditors have approved the mining company's restructuring plan, which will see many of them paid a fraction of the amount they're owed. 

Yukon Zinc’s creditors have approved the mining company’s restructuring plan, which will see many of them paid a fraction of the amount they’re owed.

The results of the vote were announced at a meeting in Vancouver today.

Under the plan, creditors owed less than $5,000 will be paid back in full, while anyone owed more will either be paid $5,000 or up to 11.5 cents on the dollar.

The Yukon government will receive the full $2.8 million that Yukon Zinc owes in security payments, and the Ross River Dena Council will also be paid back the full $170,000 it’s owed. Yukon Zinc will also pay out the full amount owed to 131 employees who were either working or on temporary layoff when the company filed for creditor protection in March.

The plan is being funded by Jinduicheng Canada Resources Corp., Yukon Zinc’s parent company.

Yukon Zinc plans to keep its Wolverine mine in care and maintenance for the foreseeable future. The mine shut down in January, citing low mineral prices, and is now slowly flooding with water.

At a meeting in Whitehorse on Monday, Yukon Zinc CEO Jing You Lu said he would like to see the mine open again.

“Why not?” he said. “If the markets resume and we can make money, why not?”

But not all of the roughly 20 people in attendance at Monday’s meeting were satisfied with the plan.

Paramijit Sidhu, with P.S. Sidhu Trucking Ltd., said he believes the mine will never operate again, since it has only two or three years of production left.

Sidhu eventually stormed out of the meeting.

“They took 10 years out of my life to help them,” he said. “And they want me to take 10 cents on the dollar.”

His company claims it’s owed close to $866,000 for trucking services.

Robert Wills, with Above Ground Engineering, said the way Yukon Zinc treated its creditors is “shameful.”

“They’re certainly not prepared to buy any goodwill in the Yukon,” he said. “As creditors, we are at a loss.”

His company is owed less than $5,000, meaning he was automatically assumed to have voted for the plan. Any creditor who will be repaid in full did not get the chance to vote against the plan.

But Wills said he would have voted no, if he’d been allowed.

“If I was owed a million dollars and only offered a hundred thousand, I would wait to see whether… I could make a better deal with a future purchaser,” he said.

During the meeting, Yukon Zinc’s court-appointed monitor, Mike Vermette, gave out details of a bid by Australian junior mining company MinQuest to buy the mine.

Had the creditors voted against Yukon Zinc’s plan, it’s possible the company would have sold its assets to MinQuest. MinQuest apparently wanted to offer creditors a similar pay-out plan to Yukon Zinc’s.

But Vermette stressed that Yukon Zinc wouldn’t necessarily have sold the mine to MinQuest, even if its plan had been voted down. Instead, it might have developed a new restructuring plan, or JDC Canada might have acquired the mine from Yukon Zinc, which likely would have landed the unsecured creditors with nothing.

Vermette insisted that Yukon Zinc’s plan is the best creditors could have hoped for. He said it’s rare for anyone to come away from a creditor protection process feeling satisfied, because creditors are always taking a hit.

“If there’s anybody who leaves the process happy, you’ve screwed up,” he said. “Because when the pie is not big enough to pay everybody, it’s just not right for somebody to leave happy.”

Once the proceedings are approved by the B.C. Supreme Court, cheques could be issued to creditors as early as Oct. 2.

Contact Maura Forrest at


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

Just Posted

Whitehorse and Carcross will be among seven northern communities to have unlimited internet options beginning Dec. 1. (Yukon News file)
Unlimited internet for some available Dec. 1

Whitehorse and Carcross will be among seven northern communities to have unlimited… Continue reading

Willow Brewster, a paramedic helping in the COVID-19 drive-thru testing centre, holds a swab used for the COVID-19 test moments before conducting a test with it on Nov. 24. (Crystal Schick/Yukon News)
An inside look at the COVID-19 drive-thru testing centre

As the active COVID-19 case count grew last week, so too did… Continue reading

Conservation officers search for a black bear in the Riverdale area in Whitehorse on Sept. 17. The Department of Environment intends to purchase 20 semi-automatic AR-10 rifles, despite the inclusion of the weapons in a recently released ban introduced by the federal government, for peace officers, such as conservation officers. (Crystal Schick/Yukon News file)
Environment Minister defends purchase of AR-10 rifles for conservation officers

The federal list of banned firearms includes an exception for peace officers

Yukonomist Keith Halliday
Yukonomist: The K-shaped economic recovery and what Yukoners can do about it

It looks like COVID-19 will play the role of Grinch this holiday… Continue reading

Fossil finds at Mt. Stephen. (Photo: Sarah Fuller/Parks Canada)
Extreme hiking, time travel and science converge in the Burgess Shale

Climb high in the alpine and trace your family tree back millions of years – to our ocean ancestors

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Mask fundraiser helps make children’s wishes come true

From Black Press Media + BraveFace – adult, youth and kid masks support Make-A-Wish Foundation

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Karen Wenkebach has been appointed as a judge for the Yukon Supreme Court. (Yukon News file)
New justice appointed

Karen Wenckebach has been appointed as a judge for the Supreme Court… Continue reading

Catherine Constable, the city’s manager of legislative services, speaks at a council and senior management (CASM) meeting about CASM policy in Whitehorse on June 13, 2019. Constable highlighted research showing many municipalities require a lengthy notice period before a delegate can be added to the agenda of a council meeting. Under the current Whitehorse procedures bylaw, residents wanting to register as delegates are asked to do so by 11 a.m. on the Friday ahead of the council meeting. (Crystal Schick/Yukon News file)
Changes continue to be contemplated for procedures bylaw

Registration deadline may be altered for delegates

Cody Pederson of the CA Storm walks around LJ’s Sabres player Clay Plume during the ‘A’ division final of the 2019 Yukon Native Hockey Tournament. The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28 in Whitehorse next year, was officially cancelled on Nov. 24 in a press release from organizers. (John Hopkins-Hill/Yukon News file)
2021 Yukon Native Hockey Tournament cancelled

The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28… Continue reading

Most Read