How a copper flat mines project in Saskatchewan ended in bankruptcy
Posted On July 14, 2021
A new copper flat mining project in southern Saskatchewan has failed to generate enough cash to pay off its debt and leave the land unsold, according to a federal investigation.
Key points:A report by a federal auditor says the project has not provided adequate security for the companyThe company’s shares fell more than 50 per cent over the past yearThe report found the company’s share price was down 50 per per cent from a year earlierThe copper flat project in the north Saskatchewan town of Copper Ridge was built to mine copper at an abandoned copper mine site.
It was sold in 2012 to a Canadian company, Copper Ridge Copper Ltd., which sold it to a company called the Copper Flat Mine Group Inc.
The federal auditor found the copper mine’s financial statements were not complete.
The auditor, in a report released on Thursday, said there were a number of deficiencies in the financial statements of the company and the investors.
It found that the company did not have a written plan for managing the copper deposits.
“As a result, the copper deposit was not sold to the investors for consideration and was not marketed to the public in accordance with the requirements of the regulations,” the report said.
The company was not required to report the financials of its assets and liabilities on its balance sheet.
It is not known how much the company lost in the copper flat, but the auditor said the company could not report that because it was not a publicly traded company.
The report said the copper mines site was not secure.
The copper flats have a number problems including high levels of water contamination, poor soil, inadequate drainage, inadequate signage and a number other issues.
The audit said the mine’s mine manager, James Czerniewicz, was “unable to perform due to fatigue, medical issues and personal circumstances.”
It said Czarniks problems were caused by a lack of oversight.
“Czarniwicz had no control over the safety of the mine, nor any responsibility to ensure that the mine was safe,” the auditor wrote.
“His inability to supervise the mine resulted in a number safety deficiencies, including inadequate and unsafe environmental control, inadequate and inconsistent safety measures and inadequate and non-compliance with safety and environmental laws.”
The auditor also found that Czornicz did not follow his company’s code of conduct for project operators and he had not conducted a thorough risk assessment of the project.
The Copper Flat mines project was also built without proper consultation with stakeholders, the report noted.
The auditors said the companies’ financial statements do not reflect the costs of construction and mining, or the potential impacts to the environment, such as the impact of the copper mining on the Great Bear Rainforest.
The project also was not designed to allow for the protection of copper deposits, the auditor noted.
Czernicz, who has been with the company for more than 25 years, did not respond to CBC News’ requests for comment.