Cobalt's Yukon Refinery back on care and maintenance.

• Author: Tollinsky, Norm
• Position: MINING

Citing financial difficulties, Swiss-based United Commodity SA has suspended operations at its Yukon Refinery in North Cobalt and terminated all but a few staff.

The company saw its shares on the Stuttgart stock exchange soar to 22 [euro] in 2013, then plunge to 3.30 [euro] before being delisted, leaving Swiss and German shareholders with worthless paper.

Also on the hook are several Cobalt area creditors and the Northern Ontario Heritage Fund Corporation, which approved a $1-million investment in the company in August 2013.

According to reports by Swiss media, United Commodity raised in the neighbourhood of US$30 million through a boiler room in Zurich with as many as 25 people selling company stock.

"On November 31, 2014, the company was sent a letter advising that its loan was in default," according to Julia Bennett, a spokesperson for the Ministry of Northern Development and Mines. "The letter requested the repayment of the funding by December 15, 2014 (but), to date, no response has been received."

The refinery is on care and maintenance with a skeletal staff monitoring its tailings facility, but it's not clear who's paying to keep the lights on or cover the payroll given the company's depleted treasury.

Being on care and maintenance is nothing new for the Yukon Refinery, which has had at least three owners prior to United Commodity's acquisition of the property in June 2012.

Originally a silver mill, Cobatec purchased and converted it to a recovery plant for tailings in the early '90s. It was subsequently converted to accept feedstock from a smelter stack in Cuba containing cobalt and nickel.

Canmine Resources purchased it in the late '90s and operated it for a few years before going bankrupt. It then devolved to bondholders represented by a Swiss financial group, which kept it on care and maintenance while trying to sell it for 10 years.

The acquisition by United Commodity was cause for celebration in the Cobalt area as 46 employees were hired and several million dollars were invested in upgrading the plant's Merrill-Crowe process to produce nickel, cobalt, silver and gold from otherwise difficult to process concentrate.

The refinery is equipped and licensed to process ore containing arsenic, which it is able to render inert by heating it in an autoclave and converting it to ferrous arsenide.

In September 2012, United Commodity issued a press release announcing an agreement with Mistango River Resources "to work together in a united...