Cyprus Amax suspends mining at Climax mine in Leadville

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Three months after resuming mining activities, Cyprus Amax Minerals (NYSE) has again decided to shut down its Climax molybdenum mine near Leadville, Colo.

Dormant since 1991, the open-pit mine was reopened April 4 to the delight of the Colorado mining community. Molybdenum prices had been rising since early in 1994. The price peaked at more than US$15 per lb. contained metal early in 1995 and has been dropping steadily.

The mine was reopened using limited Cyprus Amax personnel and contract labor. The operation was to process 15,000 tons of ore per day and about 10 million lb. of contained moly per year.

The mine will be placed on standby beginning Aug. 13, with several employees remaining on site. However, the contract labor will be released.

Cyprus Amax was the subject of a preliminary investigation by the antitrust division of the U.S. Justice Department. The investigation, which began in November, 1993, was closed without further action.

In other company news, Amax Gold (NYSE) received agreements for US$250 million in commercial bank financing for the construction and development of the Fort Knox project in Alaska.

The financing comes in two parts. The US$250 senior-term loan to Amax was co-arranged and underwritten by Merrill Lynch, NM Rothschild & Sons, Toronto Dominion Bank and ABN AMRO Bank.

The second part is in the form of an US$80-million double convertible line of credit from Cyprus Amax, of which Amax has borrowed US$35 million. Cyprus is converting that US$35 million into Amax common stock, raising its ownership of Amax to 47%.