Tacora, still in creditor protection, hints new lease on life will be announced soon
In October, Tacora Resources filed for creditor protection. It has a $75-million agreement to keep the mine operating for the next 20 weeks, which runs out in late February. (Ariana Kelland/CBC)
With Tacora Resources in creditor protection and the clock counting down on its stay of proceedings, companies are lining up to ensure they get paid — at the same time a company spokesperson hints they're not out yet.
Tacora, which owns the Scully Mine in Wabush in western Labrador, obtained creditor protection from Ontario's Superior Court in October. In documents, it cited a volatile market, raging forest fires and unexpected maintenance at the mine as contributing factors that led to the situation.
Tacora spokesperson Graham Letto told CBC News over email that an update on the company's status is due soon, hinting at good news.
"There will be news coming in the next couple of days who the successful bidder is following the closing of bids on January 19. That will be posted on the Tacora CCAA website," he wrote. Letto added that could mean a new owner or new investor.
"CCAA" refers to the Companies' Creditors Arrangement Act. As part of the creditor protection process, the court appointed FTI Consulting Canada as Tacora's monitor, which provides an online creditor portal for case updates and court-filed documents for insolvency cases.
Ticking clock
The Minnesota-based Tacora has operated the iron ore mine since 2019.
Previous owner Cliff Natural Resources closed the mine in 2014 before Tacora took over operations, which saw the loss of hundreds of jobs along with lost benefits for workers.
Around the same time Tacora entered creditor protection, it secured a $75-million agreement to keep the mine operating for the next 20 weeks, or until the end of February.
On Jan. 25, according to FTI Consulting's Tacora CCAA website, Tacora obtained an order extending its credit protection period until March 18, giving it more time to restructure its finances.
Meanwhile, a number of companies have filed mechanic's liens — claims made against a property to ensure payment — over work they claim Tacora did not pay them for.
Nova Scotia-based MacGregor's Custom Machining claims it is owed approximately $2.6 million. President and CEO Andy MacGregor declined to comment, citing the short notice.
According to documents filed at the Supreme Court of Newfoundland and Labrador, Crane Supply, a division of 13859380 Canada Inc., claimed it had an agreement with Tacora to provide materials, including pipes, valves and fittings. It's looking for $31,579.92 as well as interest at 24 per cent per annum.
JSM Electrical also claims it provided materials, labour and services, such as installation, construction, maintenance and other services at Tacora's Wabush property, and is looking to recoup $1.3 million, along with interest.
Newfound Roofing also filed for $160,020 related to materials and work it alleges was done on "emergency roof repairs" on Oct. 11.
No one from Crane Supply, Newfound Roofing and JSM Electrical replied to requests for comment by publication time.
Letto wrote that mechanic's liens are a "normal part of the CCAA procedure" and the company is not in a position to comment on anything filed on the Tacora CCAA website.
ACOA watching
In June, Tacora received $1.25 million in federal funding from the Atlantic Canada Opportunities Agency to help it process manganese.
Spokesperson Paul McGrath told CBC News that officials are monitoring the situation closely, adding that ACOA must respect the legal process of the court order.
"Specific information related to the terms and conditions of a contribution agreement, including the status of repayments, is subject to client confidentiality and cannot be disclosed," McGrath said in a statement.
He also declined to say if Tacora was still in good standing with ACOA.
"We are unable to comment further as this is still before the courts."
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