BRITISH COLUMBIA Delays, rising costs and a large working capital deficit have forced CROSS LAKE MINERALS to file for creditor protection under the Companies' Creditors Arrangement Act (Canada). PRICEWATERHOUSECOOPERS will monitor the company's reorganization efforts.
Cross Lake restarted production at the QR gold mine near Quesnel in November 2007. It operates both open pit and underground mines. Problems with electrical power distribution delayed the original startup date, subjecting the commissioning to cold weather and related problems. Cross Lake also had to make substantial modifications to the mill due to the nature of the ore from the Midwest zone. Underground mining costs continue to be high and the ounces poured have been below expectations.
At the same time Cross Lake reported that it had filed for creditor protection, it said it has made an arrangement with PROCON MINING AND TUNNELLING, its largest creditor, whereby Procon will take over management of the company. Procon has further agreed to provide financing up to $2.5 million to keep the operation afloat and make further changes to the mill.
Cross Lake will post further developments on its website, www.CrossLakeMinerals.com, and on SEDAR.
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