Cambior fights for survival

With creditors breathing down its neck, Cambior (CBJ-T) has been granted a one-month extension to turn in a plan outlining how it will repay or refinance the balance of its bank loan by the end of this year.

Caught at the wrong end of a disastrous hedging program more than a year ago, the Montreal-based company has been selling assets in order to repay its creditors. Among the first to go were the produc- ing Bouchard-Hbert and Langlois base metal mines in Quebec, which were picked up by Breakwater Resources (BWR-T) for the combined bargain price of $70 million ($53 million net, after adjustments).

For US$7 million, Glamis Gold (GLG-N) bought Cambior’s Mexican assets, including the advanced Cerro San Pedro gold-silver property, near San Jaun Potosi. This project, on which Cambior had previously spent US$15.5 million, contains proven and probable reserves of 64 million tonnes averaging 0.6 gram gold and 24.5 grams silver per tonne.

Earlier this summer, Cambior mortgaged its half-interest in the Niobec niobium mine in Chicoutimi, Que., for US$13 million. By the end of June, the company was able to meet its $75-million repayment obligation, which constituted the first phase of its financial restructuring program.

In mid-September, Cambior signed an agreement to sell La Granja, a copper project in Peru. This transaction is expected to result in net proceeds to Cambior of more than $34 million.

The sale of La Granja will allow Cambior to reduce its debt level to about $128 million. The company hopes to be able to repay or refinance the balance of its loan by year-end, while noting that “there can be no assurance in that respect.” A plan to do so must be filed by Oct. 31.