Canada-headquartered Trevali Mining’s 90%-owned subsidiary Nantou Mining Burkina Faso has filed an application for liquidation with the Judicial Tribunal of Commerce in Burkina Faso.
Under applicable Burkinabe law, a liquidator is expected to be appointed by the Judicial Tribunal in the coming days and this liquidator will assume responsibility for the management of the affairs of Nantou Mining.
Upon appointment, the liquidator will carry out or exercise, as applicable, all acts, rights, and obligations of Nantou Mining, and will be required to perform all acts necessary for the preservation of Nantou Mining’s rights against its debtors and creditors.
Nantou Mining’s liquidity position has deteriorated significantly in the months following the flooding event that occurred at its Perkoa mine on April 16.
This, together with the substantial funding requirements to carry out a restart of operations and the continued geopolitical uncertainty in Burkina Faso, including the coup d'état carried out on September 30, has resulted in Nantou Mining being unable to restart operations at the Perkoa mine at this time, or to effectively carry on its business or meet its obligations as they become due, Trevali says.
The Perkoa mine had been previously placed into care and maintenance to preserve the value of the mineral resource and mine assets and protect the environment in the mine’s vicinity, while Nantou Mining explored its available options, before ultimately determining that it was necessary to proceed with the application for liquidation.
Employees dedicated to environmental compliance and general maintenance activities at the mine site will continue their work, but the majority of the about 350-person workforce was terminated and paid severance entitlements.
Funds remain on deposit in a segregated environmental reclamation fund administered by the government of Burkina Faso to support future closure and reclamation work. Funds have also been placed in trust to fund a financial settlement with the families of the workers who died in the April flooding.
Following the appointment of a liquidator, further information will be communicated to affected parties in accordance with applicable legislation.
CCAA PROCEEDINGS
Pursuant to the initial order under the Companies’ Creditors Arrangement Act, Trevali obtained protection from its creditors for an initial period of ten days and FTI Consulting Canada was appointed as monitor of the company.
The Supreme Court of British Columbia issued an order in August approving an initial extension of the stay period until October 6.
The Court on October 6 issued an order for a second extension of the stay period until October 18.