Restructuring the shaft of shame in Red Lake.


An Ontario court approved a restructuring plan to revive a shuttered gold mine development in northwestern Ontario.

Rubicon Minerals was granted a sanction order from the Ontario Superior Court of Justice, Dec. 8, to approve the Toronto-based mine developer's refinancing and restructuring plan for its Phoenix Gold project near Red Lake.

The company sought protection from its creditors on Oct. 20. Ernst & Young was appointed as the monitor.

A majority of the affected creditors had earlier voted to approve the plan on Dec. 2.

Rubicon announced Dec. 20 that the restructuring process was complete and that the company has been notified by the TSX that its common shares will remain listed on the TSX under the symbol RMX. Rubicon shares will resume trading on Dec. 22.

In November, Rubicon closed a $45-million financing deal, which is earmarked to pay down part of the debt owed to CPPIB Credit Investments, the top-ranked secured creditor, to pay for an exploration program at the Phoenix Gold Project, and for general working purposes.

Rubicon Minerals' Phoenix Gold project is one of the Northern Ontario's most embarrassing mine development blunders.

The previous Rubicon management decided to forego a feasibility study, jumping from a preliminary economic assessment straight to construction of the surface buildings and infrastructure, the underground development, while raising hundreds of millions from investors in the process.

But Red Lake's deep and complex narrow gold vein geological structure baffled mine planners, forcing management to halt all underground development in November 2015.

The trial stoping period of its F2 Gold Deposit proved "more geologically challenging" than was first understood based on historical drilling data, the company said at the time.

Two hundred miners and 110 contractors were laid off.

The company had gone into production in 2015 with its first gold pour in June of that year as underground development work continued.

A revised...

To continue reading