VANCOUVER (miningweekly.com) – Quebec clean-technology firm Orbite Technologies has filed a notice of intention (NoI) to make a proposal under the Bankruptcy and Insolvency Act, thereby imposing an automatic 30-day stay of proceedings that will protect the company and its assets from the claims of creditors while the company pursues restructuring efforts.
The initial NoI period will allow Orbite to evaluate, with its partners, all available legal recourses and financial alternatives that may allow the company to resume its production efforts as soon as possible and “hopefully” continue as a going concern.
Orbite, which has been designing and building its high-purity alumina (HPA) plant, in Cap-Chat, has been dogged for years by delays and construction issues. The company on Friday announced that following plant instability in January and February, it has concluded that the Outotec-supplied calcination equipment does not meet contract design and performance specifications and is deficient.
Combined with further external capital costs and time required to remedy the issues, Orbite on Monday said it expects to default under the company's credit facilities, noting that these events have created material uncertainty about the company's ability to continue as a going concern.
Orbite on Friday said the present Outotec decomposer and calciner electrical heating system is not robust enough to reliably achieve the 3 t/d design capacity of the calcination system, but is rather limited to about 1 t/d to 1.2 t/d. Orbite estimates that about $8-million of external capital costs and eight months are required to implement the solution for the reliable, consistent, and continuous production of 3 t/d of 5N+ HPA.
Orbite spent more than C$30-million on acquiring and installing the calcination equipment, and the company advised that it is examining all available legal remedies to recover a significant portion of these costs and associated damages to the company.
Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
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