Shares of Curragh (TSE) added 11 cents to 60 cents after court decisions in separate parts of the country swung in the zinc miner’s favor.
In New Glasgow, N.S., criminal charges against the company and two former senior mine managers of the Westray coal mine were dropped. The charges of criminal negligence and manslaughter were too vague, said Provincial Court Judge Partick Curran. But his decision outraged relatives of the 26 miners killed by an explosion at the mine last year.
In Toronto, Curragh was given more time to come up with a restructuring plan to rescue itself from bankruptcy. Having secured a $2.4-million loan from the Yukon government, the company says it has the financial resources to carry on until Aug. 6, when it will file a plan of arrangement under the Companies Creditors Arrangement Act.
Curragh says a Korean group that intends to buy about $50 million of new Curragh equity has virtually completed its due diligence and is now assessing the results. A definitive agreement is expected sometime in August and a search for investors willing to buy an additional $25 million worth of equity is under way.
The company intends to seek a formal extension, to Sept. 30 from Aug. 31, for protection from its creditors.
Meanwhile, negotiations with the Yukon government for a $34-million loan guarantee continue. The loan would allow Curragh to develop the Grum deposit at its recently suspended Faro lead-zinc mine.
In making his ruling on Westray, Judge Curran said the charges against Curragh and mine managers Gerald Phillips and Roger Parry failed to specify exactly what they did wrong during their supervision of the coal mine before the fatal explosion.
But he added that the Crown has the right to lay new charges. Meanwhile, an inquiry into the disaster, which was shelved until the criminal proceedings were completed, may finally proceed.
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