N.W.T. mine project owner sends Canadian subsidiary into bankruptcy, drops processing plant
Earlier this year, Vital Metals said price for Saskatchewan plant jumped from $20M to $60M
Despite fanfare, federal funding and even a visit from the prime minister, the owner of an N.W.T. mine project is closing down its processing plant in Saskatoon.
Vital Metals owns Cheetah Resources, which is the owner of the Nechalacho mine project, about 100 kilometres south-east of Yellowknife. The project is one of the first rare earth metal mines in Canada.
Following a strategic review, Vital Metals announced it would be placing a separate subsidiary that owns the processing plant into bankruptcy and liquidating its assets.
"We've demonstrated that the Saskatoon facility doesn't make economic sense for us to operate, so we've decided to terminate that facility," said Richard Crookes, the company's interim chairman, in a video statement.
Earlier this year, Vital Metals said the price for the plant jumped from $20 million to $60 million.
It tried selling an intermediate rare earth product, but was "unable to secure sales of the intermediate product on commercially satisfactory terms."
Vital says the closure of the plant does not affect operations at the Nechalacho site and that the company is now focused on developing its Tardiff deposit.
Company ends agreement with purchaser
Vital has also ended its agreement with REEtec, a Norwegian company meant to purchase Nechalacho product.
Under the current agreement, according to Vital, due to conditions outside of its control it "would cause unfair hardship."
Vital said REEtec "does not agree with Vital's assessment that it has suffered unfair hardship, nor does it consider the Notice of Termination to be valid."
The disagreement could lead to an arbitration process between the two companies.