MONTREAL (CP) -- Quebec gold miner Campbell Resources Inc. has been granted bankruptcy court shelter while it prepares a restructuring plan to deal with its capital shortage and mining problems.
The company said Thursday it will continue operations during restructuring at two gold and copper mines in northwest Quebec, where about 250 employees work.
On the Toronto stock market, Campbell Resources shares [TSX:CCH] melted 70% to close at C7.5 cents, a drop of C17.5 cents, after the Quebec Superior Court granted the order under the Companies' Creditors Arrangement Act.
''Difficulties in the startup of the Copper Rand mine and a shortage of capital have combined to create a situation where the operations cannot generate enough cash to allow the company to carry on without a financial restructuring,'' stated Andre Fortier, CEO of Campbell, which is focused in the Chibougamau region of Quebec.
Work at Copper Rand has encountered equipment problems, unstable ground conditions and reduced ore and waste-hoisting capacity during repairs to a mining shaft.
Campbell also announced it will abandon a C$5-million financing announced May 11.
''We came to the conclusion that the issue we planned would not have solved all our problems,'' Fortier said in an interview.
''We have to find a global solution, which means a combination of financing and disposing assets.''
As of March 31, the company had $322,000 in cash, while its long-term debt was more than $63 million.
(c) The Canadian Press 2005
