Embattled project developer Nemaska Lithium has announced a further reduction of its workforce as a restructuring continues under creditor protection entered into last month.

The company on Monday announced that another 29 people would be laid off, leaving the organisation with little over 30 employees.

Nemaska in December moved to seek creditor protection, as the company continued talks with mine financier the Pallinghurst Group to secure up to C$600-million to advance the Whabouchi project, in Quebec.

With a deal yet to be announced, the company suspended operations in October and laid off 64 employees. The project is facing cost overruns of about $300-million.

The latest layoff is the result of a review of the essential activities that the corporation must carry out to ensure the development of the Whabouchi project, while preserving its cash in anticipation of the examination of available alternatives, including any refinancing to allow an orderly resumption of the project.

“It is with great sadness that we must let go our colleagues. Their hard work over the years, sometimes under challenging circumstances, allowed us to advance the Whabouchi project to the maximum while awaiting the required financing to complete it. I would like to sincerely thank them for their important contribution,” said president and CEO Guy Bourassa.

“This difficult decision was inevitable at this point. We are offering all the support and guidance to the employees that are leaving us, and which may help them towards their next steps. We sincerely hope to have the privilege to welcome back many of them once we are able to resume the project."

Whabouchi is considered one of the richest lithium spodumene deposits in the world, both in volume and grade, and the spodumene concentrate to be produced will be processed at the Shawinigan plant using a unique membrane electrolysis process for which the corporation holds several patents.