Investissement Québec (IQ) risks losing $10 million in the insolvency of a small mining company active in Abitibi.
• Read also: Monarques shareholders approve sale to Yamana Gold
• Read also: Abitibi-Témiscamingue: the Caisse is banking on the Beaufor gold mine
The government’s financial arm lent $13.5 million to Monarch Mining during the 2021-2022 fiscal year and $5 million in 2022-2023 for a total of $18.5 million.
As of today, Monarch still owes $9.9 million to IQ, the Newspaper a spokesperson for the state-owned company, Isabelle Fontaine.
“In collaboration with Monarch, Investissement Québec tried to find a buyer, without success,” she added.
This summer, Monarch sold the Croinor gold deposit to the Toronto company Probe Gold for $4.5 million, which allowed it to “partially repay IQ,” said the accounting firm PwC in a report filed in Superior Court. last week.
Created in 2021, Monarch relaunched activities at the Beaufor underground gold mine and the Beacon processing plant last year.
“The restart and commissioning of the Beacon plant was slower than expected in July and August 2022, where it only operated at approximately 50% capacity,” PwC reported. Operations were finally suspended in October 2022 and all 175 employees were laid off.”
Less gold than expected
“The grade of the ore stocks processed during these two months turned out to be lower than expected, standing at around one gram or two grams per ton instead of a grade initially estimated at 4.8 grams per ton,” 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 relaunch of the Beaufor mine.
“On net, through its various investments in Monarch, the Fund has made gains,” assured a spokesperson for the institution.
Monarch was formed after 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.
– With Philippe Langlois, QMI Agency