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PrintCanadian base metal miner Liberty Mines halted production as nickel prices remain depressed and said its largest shareholder has committed a loan of C$5-million, allowing the company to continue as a going concern.
Lower imports by China, the world's biggest nickel consumer, have weakened benchmark prices, and traders expect volumes to decline in the third quarter as demand remains thin.
Nickel prices have fallen 20% this year on the London Metal Exchange.
"Our decision to suspend production temporarily is not being taken lightly, but is ultimately in the best long-term interests of our investors and strategic partners," said CEO Chris Stewart.
Liberty, which had a long-term debt of C$24.5-million as of March, said its primary shareholder, Jien International Investment, was re-evaluating the terms of a debt restructuring plan due to declining metals prices.
The company, which had net cash of C$550 000 as of March, cancelled a plan to raise C$10-million through unit offerings, citing adverse market conditions.
Liberty said it was reviewing other financing arrangements.
The company, which also mines copper, cobalt and platinum in Ontario, also suspended exploration at its projects in Timmins, Ontario.
Prices of other base metals have also fell in the June-quarter.
Shares of the company, which has a market value of C$17.6-million, closed at 85 Canadian cents on Monday on the Toronto Stock Exchange.
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