Investissement Québec (IQ) risks losing $10 million from the bankruptcy of a small mining company operating in Abitibi.
• Also read: Monarques shareholders approve sale to Yamana Gold
• Also read: Abitibi-Témiscamingue: The Caisse is betting on the Beaufor gold mine
The government’s treasury department loaned Monarch Mining $13.5 million in the 2021-2022 fiscal year and $5 million in the 2022-2023 period, for a total of $18.5 million.
As of today, Monarch IQ still owes $9.9 million, a spokeswoman for the state-owned company, Isabelle Fontaine, told the Journal on Wednesday.
“In collaboration with Monarch, Investissement Québec attempted to find a buyer without success,” she added.
This summer, Monarch sold the Croinor gold deposit to Toronto company Probe Gold for $4.5 million, allowing it to “partially repay IQ,” accounting firm PwC said in a report filed in Superior Court last week .
Monarch was founded in 2021 and last year resumed operations at the Beaufor underground gold mine and the Beacon processing plant.
“The restart and commissioning of the beacon facility was slower than expected in July and August 2022, where it was only at approximately 50% capacity,” PwC reported. In October 2022, operations finally ceased and all 175 employees were laid off.”
Less gold than expected
“The grade of the ore reserves processed during these two months turned out to be lower than expected, at around one or two grams per tonne instead of an initially estimated grade of 4.8 grams per tonne,” he said. noted PwC.
For its part, the Caisse de dépôt et Placement announced in May 2020 an investment of $5 million to “support” the restart of the Beaufor mine.
“On a net basis, the fund has made profits through its various investments in Monarch,” assured a spokesman for the institution.
Monarch was formed following the sale of the Wasamac gold project and other assets owned by its predecessor, Monarques Gold Corporation, to Ontario giant Yamana Gold for approximately $200 million in 2021.
Remember that a few weeks ago the government also suffered financial losses with the closure of the Renard diamond mine in Nord-du-Québec.
Originally posted 2023-11-23 17:20:26.