First Nickel Inc. (“FNI”) is a Canadian nickel mining and exploration company, the shares of which were traded on the Toronto Stock Exchange. FNI owned and operated a nickel mine in Sudbury, Ontario known as the “Lockerby Mine”. FNI also had rights to exploration properties in Sudbury, Bancroft, Belmont Townships and Timmins.
As a result of the decline in nickel prices and FNI’s significant operating costs, the Lockerby Mine became uneconomic. FNI’s senior lenders brought an application for the appointment of KSV as receiver. Our challenge was to generate value from the above and below ground mining equipment on an expeditious basis given FNI’s significant burn rate, even in FNI’s idle state. We dealt with the abandonment of the mine to the Ontario Ministry of Northern Development and Mines in order for it to commence a rehabilitation and reclamation process consistent with FNI’s mine closure plan. In that regard, we addressed complex legal and practical issues raised by stakeholders, including the Ministry, the unions, the bonding company and utility regulators.
The mandate involved extensive negotiations of a Court-approved procedure to abandon the Lockerby Mine shortly following our appointment. During that time, we were able to generate positive cash flow from the sale of mining equipment by facilitating an expedited sale and equipment removal process. We also carried out a Court-approved sale process for the exploration properties and completed a sale transaction for those properties to a third party exploration company.