The accounting firm that audited a Canadian company seeking to develop a mineral mine in northern Penobscot County said Wolfden’s consolidated financial statements cast “significant doubt” about its ability to stay in business.
During October public hearings, the Maine Land Use Planning Commission asked Wolfden officials for an audited financial statement, which was subsequently filed with the commission by the Nov. 2 deadline.
The Toronto auditor, Grant Thornton, said that Wolfden has no source of operating cash flows, has not yet achieved profitable production and had accumulated losses of $40,834,518 as of Dec. 31, 2022.
The filing followed months of document gathering, public comment and four days of public hearings on Wolfden’s application to change the zoning for 374 acres at Pickett Mountain near Mount Chase from limited use to a planned development subdistrict for the proposed underground metallic mineral mine.
The commission is slated to deliberate and potentially decide on the Wolfden matter at 10 a.m. on Dec. 13 at Jeff’s Catering at 15 Littlefield Road in Brewer. The deliberations will be live streamed as well.
The zoning change would allow Wolfden to apply with the Maine Department of Environmental Protection for a state mining permit. Without the commission’s approval, Wolfden can’t proceed with its plans to mine minerals like zinc, copper and lead at Pickett Mountain.
This is Wolfden’s second rezoning application. Officials withdrew a 2020 rezoning application after the commission’s staff pointed to missed deadlines and inconsistencies in the initial rezoning attempt.
Junior mining companies like Wolfden are exploratory in nature, have limited financial resources and more than half fail, University of South Carolina associate professor of geography David Kneas said in a previous interview.
Wolfden’s ability to continue to develop its mining resources is largely dependent on raising additional capital through investors, according to the auditor’s report. And while the Canadian company has been successful in raising some funds to move forward, the current market is volatile and out of Wolfden’s control.
“There remains material uncertainties that cast significant doubt on the Corporation’s ability to continue as a going concern,” the auditors said. “It is not possible to predict whether financing efforts will be successful or if the Corporation will attain profitable levels of operation.”
Financial viability is one of several factors the planning commission and its staff will use in deciding whether to approve Wolfden’s application. The commission must determine if the Wolfden Pickett Mountain mining project has the ability to develop a large-scale well-planned development, according to the commission’s deliberation guidelines.
During public hearings, those opposed to Wolfden’s rezoning request pointed to its financial instability, while those in favor believed the company will bring hundreds of new jobs and improve the region’s economy.
On the first day of hearings in Millinocket, Sean Fieler, president of Equinox Partners, said that the viability of junior mining companies are judged not by their financial statements but by the quality of the deposit. Equinox Partners owns 20 percent of Wolfden and he said the proposed project has a likelihood of future profitability.
Wolfden CEO Ron Little said during that same hearing that Wolfden has never operated a mine and that they do not know if they will have the financial resources to complete the project and that there is potential for a company takeover once the mining project is approved.
Commissioner Leo Trudel, who represents Aroostook County, said during the public hearing that Wolfden is a penny stock company.
The commission’s staff will present the key standards, evidence and factors regarding the Wolfden application during the deliberation meeting before commissioners decide on the application.
