Tumbling commodity prices have forced the province’s only base metal miner to seek creditor protection while it looks for ways to restructure $5.4 million in debt.

William Felderhof, president of Acadian Mining, said ScoZinc Ltd., a wholly owned subsidiary operating the company’s lead-zinc mine in Gays River, has obtained an order from the Nova Scotia Supreme Court that will give it a minimum of 30 days’ protection from creditors interested in taking action against the assets of the company to get what they are owed.

"There has been such a drastic decline in metal prices (that) there are very few mines, almost no mines that can be making money," Mr. Felderhof said in a telephone interview Tuesday.

"Across the world 10 base metal mines have closed and another six have curtailed operations."

In January, zinc was selling for US$1.08 per pound and lead was going for US$1.23. On Monday the price for zinc was 51 cents per pound and lead was 39 cents per pound.

In an effort to deal with the dramatic drop in prices, Acadian has cut 65 jobs at the mine in recent months, reducing the workforce to 70, roughly half the number of workers that it employed in October.

Those 70 people "will continue working through until February or March on a reduced basis when we will be reassessing the situation," Mr. Felderhof said.

The company said in a release that it might consider downgrading operations to "care and maintenance" status until zinc and lead prices become more favourable or use the facility to process gold ore from one or more of Acadian’s nearby gold properties.

Acadian’s gold assets are held in another subsidiary, which is not affected by the court filing.

In a related development, the court authorized ScoZinc to borrow up to $250,000 to meet short-term operating commitments; on Dec. 31 it will consider requests to borrow up to $1 million. The creditor protection will expire Jan. 20, but the court can extended it.

Mr. Felderhof said a big part of the drop in commodity prices has been the slowdown in the auto industry. Almost all vehicles are zinc-coated in the manufacturing process and 80 per cent of all lead that is mined ends up in car batteries.

When prices recover, he believes they will climb sharply because with so many mines closed, there won’t be enough product to meet demand.

During the protection period Grant Thornton will be responsible for monitoring ScoZinc’s ongoing operations and assisting with the development of a restructuring plan.

Late in the day Tuesday Acadian shares were trading at 2.5 cents per share. Earlier in the year they traded as high as nine cents per share.

( sproctor@herald.ca)