Bema converts debt to equity

By converting its debt to equity, Bema Gold (TSE) significantly improved its financial position in 1993.

Convertible debentures totaling $15.8 million were swapped for equity, and a further 1.1 million shares were issued on exercise of $2 convertible debenture share-purchase warrants, raising the number of outstanding shares to about 50 million.

The company now has no long-term debt and a working capital deficit of about $2 million. The deficit includes $6.4 million in additional convertible debt exchangeable at prices ranging from $1 per share ($2.7 million) up to $2.50 per share ($3.4 million).

Bema is trying to raise financing to get its half-owned Refugio project in Chile back on track. Progress has been delayed by corporate developments at Amax Gold (NYSE), the joint-venture partner. (Amax Gold’s parent company has merged with Cyprus Minerals to form New York-listed Cyprus Amax Minerals, which now holds a 40% interest in Amax Gold.) Bema expects to meet soon with company officials to discuss plans for the project.

At last report, minable reserves at Refugio were estimated at 112 million tons grading 0.03 oz. gold per ton at a strip ratio of about 1-to-1. A final feasibility report, based on a 33,000-ton-per-day operation, put annual heap-leach gold production at 233,000 oz. at a cash cost of US$175 per oz. Capital cost is estimated at US$130 million.