The Whabouchi mine site.
Canada-based lithium junior Nemaska Lithium is downsizing by letting go 64 employees, owing to delays in finalising a $600-million financing agreement with investment firm Pallinghurst Group.
The workers’ employment will be terminated between the end of October and the end of December, depending on the site, the company said this week.
Nemaska stressed that it remained confident in its ability to successfully complete the project, but said that it could not pinpoint a precise date for closing the required financing.
“As we cannot confirm the timeline for the resumption of construction, and although negotiations with Pallinghurst are progressing well, this is the responsible decision to be made,” said Nemaska president and CEO Guy Bourassa.
The mining company is adjusting the rhythm of work at the Whabouchi mine and the Shawinigan plant.
Over the next few weeks, the employees working at the Whabouchi mine would finish winterising the site and would assist the construction crews in completing certain work before the beginning of the winter season. Nemaska would thereafter see to preserve its assets and ensure the regulatory compliance of its facilities.
Having fulfilled the main objectives for its construction, the Shawinigan Phase 1 Plant would continue its activities until its complete shutdown at the end of December. This demonstration plant, in operation since February 2017, has been a major asset for the development of the Whabouchi project, having showcased the reliability of its patented process and the exceptional quality of its product, intended for the lithium battery market.
“Once financing is completed, we will have a better visibility on the timeline for the implementation of the project and the resumption of more sustained activity,” said Bourassa.
The company said earlier this month that it hoped to conclude an investment deal with Pallinghurst by the end of December.
Pallinghurst cofounder and MD, Arne Frandsen, said previously that the group had been impressed by its review of Nemaska. He said that Pallinghurst would be open to explore with Nemaska’s largest shareholders an additional capital injection to potentially substitute certain elements of the current financing structure.
The parties announced in July that Pallinghurst is contemplating a C$200-million private placement, at C$0.25 a share, and a standby purchase agreement to fully guarantee the successful completion of a rights offering of up to C$400-million, at the same price.
Over the life-of-mine, the Whabouchi mine is expected to produce seven-million tonnes of spodumene concentrate, which will be converted into 770 000 t of battery-grade lithium hydroxide and 361 000 t of battery-grade lithium carbonate.
Nemaska in February said that it needed about C$375-million to complete the project and adjusted the pace of development.