Post by
Loserboard on Aug 21, 2020 10:07am
Not looking good.
Nemaska Lithium: a "kid's patent" as a financial package, says Fitzgibbon PHOTO FROM THE NEMASKA LITHIUM WEBSITE Nemaska Lithium, which filed for protection from its creditors on December 23, 2019, wants to operate a lithium mine in James Bay and a processing plant in Shawinigan, a project for which it had already collected CAN$1.1 billion. (Quebec) The Minister of the Economy, Pierre Fitzgibbon, has not spared Nemaska Lithium - which is in the process of legal restructuring - calling the former financial structure a "kiddie-patent" that did not work. Published on August 21, 2020 at 7:00 am Share Fanny LvesqueFANNY LVESQUE THE PRESS Under the Liberal government, Quebec invested a total of $130 million in the so-called "kiddie patent". "This is a very, very sad issue that saddens me," said the Minister of the Economy during the credit review in Quebec City on Thursday. He was then questioned by Parti Qubcois MP Martin Ouellet, who was trying to take stock of the Nemaska Lithium project, in which Investissement Qubec had injected $80 million in capital stock. "We have $80 million in a patent that is not working. I'm very disappointed about that [...], it's a project that was very, very badly put together," he continued, illustrating that each Quebecker held the equivalent of $10 in this company. "The write-off [that we did at Investissement Qubec] was heartbreaking," he added. The Qubec government also advanced $50 million to Nemaska. Nemaska Lithium, which filed for protection from its creditors on December 23, 2019, wants to operate a lithium mine in James Bay and a processing plant in Shawinigan, a project for which the company had already raised C$1.1 billion. "I found out that there were shareholders, Softbank, not to name him, who were [shareholders] just like us, but they had 20 per cent of the production that they could buy at a discount. In addition, there was a U.S. financier named Orion, who had 5,000 tonnes of lithium carbonate that he bought at a 60% discount on the price: it's a kid's patent," the minister said. It's a kid's patent," the minister said. "We were picked up on December 23, 2019. The Christmas tree went out of order, no more lights. Sad, very sad," he continued, leaning on his words. Not the only saviour Nemaska Lithium has obtained a new deadline from the Superior Court of Quebec to extend the deadline for proposals to September 4. The company is looking for investors who would allow it to pursue its mining project, the cost of which has risen along the way. In September 2019, the Nemaska project was facing cost overruns of CAN$375 million. In the fall of 2019, when the company was experiencing financial difficulties, Minister Fitzgibbon had clearly stated his intention to "save" it. On Thursday, he warned that the government couldn't be alone in this endeavour. There's $1 billion missing from the patent to finish the mine and plant...". If we keep the current structure...there is no one to invest", said the minister, who also said that he "hopes to be wrong". "Is the government going to put in $1 billion because we are the only ones left? The answer is no", he said, citing the example of Cirque du Soleil. Just as I said about Cirque, at $1.3 billion, I was not interested either. The government is rigorous. Pierre Fitzgibbon Minister Fitzgibbon pointed out that the process was "judicialized" and that he was not in a position to provide answers for the rest of the process, especially when asked about the fate of the company's smallest shareholders, including thousands of Quebecers. According to the report of the trustee responsible for the restructuring of Nemaska Lithium, 13 groups or companies expressed interest and eight of them were deemed qualified to submit a bid. More macro" plan Pierre Fitzgibbon stated that he continues to believe in the potential of lithium and has a desire to develop the battery industry more widely in Quebec, he told the commission. He estimates that "7 to 8 billion" would be needed to develop it in Quebec. "We can't do it alone," Fitzgibbon said. He referred to the Pallinghurt Fund, which was first approached in the context of Nemaska's difficulties. In the end, there was no agreement. "They are a partner, like others, who want to work with us on this more macro level," he said. A mandate was also given to the McKinsey firm to accompany the government in its efforts. "The element of sale in Quebec is cobalt, nickel, graphite and lithium.... I don't think Tesla is going to come to Quebec to make tanks, but I think we can go far down the chain," he illustrated. Given the appetite of the parties