The Legault government is investing $4.3 million more in a critical metals extraction and processing project that has experienced significant financial difficulties in recent years.
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The sum will be injected by the Ministry of the Economy into the share capital of Strategic Resources, a Vancouver company that has just moved its head office to Montreal.
Strategic’s top executives, including CEO Sean Cleary and CFO Dan Nir, however, reside outside of Quebec.
The company is working to develop the BlackRock project, which involves the construction of a vanadium and titanium mine near Chibougamau, in northern Quebec, as well as a metallurgical plant at the port of Saguenay.
At the end of 2021, BlackRock became insolvent. Its two main secured creditors, the New York firm Orion Resource Partners and the Quebec government, subsequently took control of the company. It has just merged with Strategic Resources, whose shares are listed on the TSX Venture Exchange.
The millions are piling up
Prior to the recent restructuring, Quebec had invested approximately $50 million in BlackRock. Then last year, the government loaned the company $14 million, plus the new investment of $4.3 million.
Quebec and Orion each hold 41% of Strategic. The company’s other major shareholders are British Columbian billionaire Ross Beaty (4.4%), Aurion Resources (2.3%) and Magnus Minerals (0.7%).
“This is an excellent time to take the BlackRock project to the stock market given the favorable metals market conditions,” Mr. Cleary said in a recent statement. Our high purity steel will be very useful for the transition to green steel and the electrification of the iron and steel industry.”
Strategic expects the government to loosen its purse strings again for the construction of the project, whose bill is currently valued at $1.5 billion. The company, however, expects most of the funding to come from the private sector.
Strategic Resources stock closed at $2.50 yesterday.