Croft Aggregates: the court approves a gravel pit's sale to True North

The sales sheet from Colliers International's 2021 attempt to sell the Croft Pit described a "176 Acre Aggregate Quarry" six kilometres east of Regina, a kilometre north of Highway 46, with an asking price of $13,375,000 and a geotechnical study putting the aggregate left to be mined at approximately 11.5 million tonnes. The land was "currently contracted out to an operator who is paying a 'per tonne' royalty," the sheet said, per the First Report of the Receiver, Apr. 7, 2026, App. E, pp. 136–137. Colliers later told the receiver it had not broadly marketed the pit in 2021; it had approached some prospective purchasers directly, and no offers were received. The price, Colliers said, rested on reserve estimates "adjusted for extraction," with "no consideration given to what may have been 'economically recoverable' at that time," per the First Report of the Receiver, Apr. 7, 2026, para. 34.

The pit belonged to Croft Aggregates Limited, incorporated in Saskatchewan in 2004, with Douglas Wayne Crofts and Sandra Gail Crofts as directors. It stopped working the pit itself in mid-2020 and had no employees when the receivership began; from 2020 the digging was done by KF Aggregates Inc., whose managing partner is Clint Vos, per the First Report of the Receiver, Apr. 7, 2026, paras. 11, 13, 17–18. On April 10, 2026, Justice C. D. Clackson of the Court of King's Bench for Saskatchewan approved the receiver's sale of the pit, its stockpiles and its equipment to True North Aggregate & Recycling Ltd., which the receiver describes as "a company owned by Mr. Vos," per the Sale Approval and Vesting Order, Apr. 10, 2026, para. 2 and the First Report of the Receiver, Apr. 7, 2026, para. 48. The price is in a confidential supplement that the court sealed until the transaction closes, per the Sealing Order, Apr. 10, 2026, para. 2 and the Notice of Application, Apr. 7, 2026, para. 14.

A royalty of $2.00 a tonne

Conexus Credit Union 2006 had four demand facilities with the company, secured on its land and personal property. Lindsey Cooper, Conexus's risk manager, swore that the company was in default by July 2020, that Conexus demanded repayment on July 30, 2020, and that no payment had been made since October 15, 2019. A forbearance agreement of December 12, 2022 with the company and both directors held Conexus off until January 15, 2023 in exchange for, among other things, a consent receivership order; it expired without the debt being paid. The debt was $8,974,802.57 on August 28, 2023, per the Affidavit of Lindsey Cooper, Sept. 1, 2023, paras. 4–6, 10–14, 17. "The Debtor is no longer operating and does not have sufficient funds to meet its obligations to Conexus," she swore, and "there is a risk that Conexus's security will be eroded to the interests of the Federal and Provincial Governments," per the Affidavit of Lindsey Cooper, Sept. 1, 2023, para. 22. The Business Development Bank of Canada ranked equally with Conexus under a 2015 inter-creditor agreement, except on certain listed equipment where BDC came first, and by its counsel's account was owed approximately $3.34 million as of October 12, 2023, per the First Report of the Receiver, Apr. 7, 2026, para. 12.

The affidavit's exhibits carry the operator's contract. A Lease and Aggregate Extraction Agreement dated for reference June 1, 2020 gave KF the sole and exclusive right to extract, process and sell material from the lands for six years, renewing for six more unless KF declined, in return for $1.00 a year in rent and a monthly royalty of $2.00 per metric tonne extracted and removed. In it the company acknowledged owing KF $1,631,768.25 for overburden and soil stripping between June 15, 2019 and May 31, 2020, which KF could set off against future royalties, and gave KF a one-time right of first refusal: 45 days to match any bona fide offer the company was prepared to accept. Mr. Vos signed for KF as managing partner, per the Affidavit of Lindsey Cooper, Sept. 1, 2023, Ex. Q, pp. 328–336 (ss. 3.1, 3.4, 3.6, 4.1–4.2, 6.1).

A receiver at the pit

Justice P. T. Bergbusch appointed Deloitte Restructuring Inc. as receiver on September 27, 2023, on Conexus's application under s. 243(1) of the Bankruptcy and Insolvency Act, The King's Bench Act and The Personal Property Security Act, 1993, "upon noting the consent of the Debtor," per the Receivership Order, Sept. 27, 2023, recitals, para. 2. That day the receiver went to the pit, where Mr. Vos showed it KF's extraction work, and at his request and that of KF's then counsel it let KF keep operating on similar terms, with daily reports of all material entering or leaving. "As Croft Aggregates had no employees, allowing KF Aggregates to continue with operations enabled the ongoing monitoring of the Croft Pit," the receiver wrote; in consultation with Conexus, it chose not to disrupt KF "in order to preserve Croft Aggregates' rights to continued royalties," per the First Report of the Receiver, Apr. 7, 2026, paras. 13–14, 17. On January 8, 2024, on Deloitte's application, Justice A. R. Rothery substituted BDO Canada Limited as receiver, per the Substitution Order, Jan. 8, 2024, paras. 2–3.

Clifton Engineering Group Inc. completed a drone LiDAR survey of the site on October 6, 2023 and a sonar survey of its six large water bodies on October 17, per its report in the First Report of the Receiver, Apr. 7, 2026, App. C, pp. 67–68. On Clifton's figures the surface stockpiles were worth approximately $20,900 to $32,600. Its November 2023 draft estimated 8,202,776 cubic metres in the ground, 2,417,269 of them overburden, and put the in-place reserves at approximately $12.2 million to $18.7 million. The receiver adds that Clifton "clearly differentiated" in-place reserves from "estimated economically recoverable" ones, and, as the draft detailed, "due to the shallow water table in the area, and the inability to keep ground water under control in an economical manner, the maximum depth of excavation becomes a challenge." The recoverable reserves are discussed more fully in confidential material, per the First Report of the Receiver, Apr. 7, 2026, paras. 21–23.

Offers, a counter-offer and a waiver

On November 27, 2023, KF offered $1.0 million for the stockpiles, equipment and pit, an offer that would also have settled debts KF alleged the company owed it and any equity it had in the company's operations and equipment. Given the reserves in Clifton's draft, Conexus "was not prepared to consider" it and said any offer "would have to be materially increased," per the First Report of the Receiver, Apr. 7, 2026, paras. 29–30. In January 2024 KF offered $400,000 for the equipment alone; Mr. Vos, the receiver reports, "intended to obtain an environmental assessment prior to making any increased offer for the Croft Pit," per the First Report of the Receiver, Apr. 7, 2026, para. 31.

After BDC told the receiver of the 2021 listing, Colliers reviewed Clifton's final report and by June 10, 2024 had suggested a list price of $9.0 million. On June 27, with both lenders' support, the receiver countered at $8.0 million for the pit, equipment and stockpiles and a settlement of all other obligations among KF, the company and the receiver, including the royalties and lease fees payable by KF to the receiver since the receivership began, per the First Report of the Receiver, Apr. 7, 2026, paras. 34–37.

KF answered on August 13, 2024 that it believed the counter-offer "far too high" but wanted to work with the receiver on any sale, that it believed the extraction agreement gave it a right of first refusal, and that it believed it had built up equity in the equipment, putting the purchase option under its equipment lease at $92,019. The receiver's position, sent by its counsel, Miller Thomson LLP, to the lenders' counsel on September 3, was that KF had already purported to exercise that option, in a November 15, 2020 agreement at $888,810, and could not exercise it again, per the First Report of the Receiver, Apr. 7, 2026, paras. 38–39. On October 9, KF agreed to waive the right of first refusal on condition that the receiver "meaningfully engage" with it on its "ongoing interest and right to the Equipment" and keep it "fully apprised" of developments in the sale, with advance notice of the listing, any accepted offer and the anticipated closing. It executed the waiver on October 23, 2024, per the First Report of the Receiver, Apr. 7, 2026, paras. 42–43.