First Nickel Inc. has gone into receivership, the company confirmed in an Aug. 20 press release.
Employees at First Nickel's Lockerby Mine in Sudbury were reportedly turned away Thursday morning at the gate and told the mine was closed.
After a poor financial showing the first quarter of 2015, where the company lost $33.1 million, its main lender, Resource Capital Fund V L.P., demanded repayment of all of the obligations owed to it by First Nickel.
Resource Capital Fund V L.P. issued a notice of intention to enforce its security under the Bankruptcy and Insolvency Act and has put forward an application to appoint KSV Kofman Inc. as a receiver of First Nickel.
The application is being heard today in Toronto at the Ontario Superior Court of Justice.
In law, a receiver is responsible for the property and assets of a company that has failed to meet its financial obligations, or has gone bankrupt.
The receiver may run the company in order to maximize the value of the company's assets, sell the company as a whole, or sell part of the company and close unprofitable divisions.
Anne-Marie MacInnis, president of Mine Mill Local 598/Unifor, which represents First Nickel's workers at Lockerby Mine, said the company has already appointed a four-person salvage crew to recover mine equipment.
MacInnis said an official with First Nickel assured her the mine employees received any wages and vacation pay owed to them on Thursday.
MacInnis said because the mine had only been open for around 10 years, employees did not yet qualify for the 30-year pension plan, but added the plan was portable, and could continue at another workplace.
The union is negotiating severance pay for workers, who are owed $1,000 for every year of service under the terms of the collective agreement with First Nickel.
All employees are currently entitled to $3,800 in severance, MacInnis said, but that leaves those who have been with the company as long as nine years short $5,200 in severance pay.
In early January, First Nickel restructured its operations at the nickel-copper mine, and cut 75 per cent of its contractors and 30 per cent of its permanent workforce — from 164 jobs to 115.
The cuts represented around 45 per cent of First Nickel's Sudbury workforce.
In June, First Nickel announced it would be halting development of an underground ramp at the Lockerby Mine.
“We will now shift our focus to maximizing production of the remaining ore and then transitioning to care and maintenance or closure,” said First Nickel president and CEO Thomas Boehlert at the time. “The company is currently in discussion with its secured lenders regarding alternatives with respect to its outstanding indebtedness in light of the expected timing of cessation of mining at Lockerby.”
Mine and union officials could not immediately be reached.
