Vital Metals (ASX: VML; US-OTC: VTMXF), the only rare earths producer in Canada, has declared bankruptcy for its Canadian subsidiary after a review of its half-finished $55-million processing facility in Saskatoon.
The Australian junior appointed accounting firm MNP Saskatoon bankruptcy trustee of Vital Metals Canada, the parent company said in a news release on Friday. MNP will sell the assets and distribute proceeds to creditors. Vital’s shares last traded at A1.1¢, for a market cap of A$43.8 million ($38.2 million) before it halted trading in April.
The decision, among Vital’s findings in the review that it began in April, was also made to allow the best chance of advancing the Tardiff deposit, part of its Nechalacho rare earths project in the Northwest Territories, Vital said. The company said in a July release that the review had largely been completed.
Vital’s other Canadian subsidiary, Yellowknife-based Cheetah Resources, which owns the Nechalacho properties, is unaffected by the bankruptcy.
“While we are disappointed with the situation at Saskatoon, Vital remains focused on creating significant value for shareholders by advancing the Tardiff project,” Vital’s interim chairman Richard Crookes said in the release, adding that the company tried to work with all parties to find an acceptable path forward for the processing business in Saskatoon on alternate terms.