Campbell files for protection from creditors

Vancouver The Superior Court of Quebec has granted Campbell Resources (CCH-T) protection under the Companies’ Creditors Arrangement Act until the Montreal-based mining company presents a financial restructuring plan to various stakeholders.

Campbell says it sought court protection because of a shortage of capital and operating difficulties in the start-up of the Copper Rand mine in the Chibougamau mining camp of northern Quebec.

The company encountered various problems at Copper Rand, including unstable ground conditions encountered while developing a critical ventilation raise, and reduced ore and waste-hoisting capacity during repairs to a section of the shaft.

Major problems with mine equipment also contributed to the poor performance of the underground mine. As a result, development of stopes and working faces were below planned levels, resulting in reduced levels of production and a subsequent cash-flow crunch.

Campbell intends to operate Copper Rand and the nearby Joe Mann mine during the restructuring period. In May, these mines collectively produced more than 4,500 oz. gold and 700,000 pounds copper, compared with 3,500 oz. gold and 890,000 pounds of copper in April. About 250 employees work at the two Chibougamau mines.

Campbell posted a net loss of $2.7 million in the first quarter of this year, compared with a net loss of $1.8 million a year earlier. The company attributed the increased losses to various problems at both its mines. A few months ago, the company planned to raise $5 million by way of a convertible-note financing, but those plans will not be concluded.