The government of Newfoundland has agreed to buy $20 million of the external debt of Baie Verte Mines, a wholly owned subsidiary of Cliff Resources (TSE), for 20 million redeemable preference shares.
Quarterly dividend payments on the shares will be lower than the interest charges currently being paid. The financing arrangement with the government will enable Baie Verte to reduce overhead costs and to improve the company’s balance sheet.
Work on a $16-million wet process asbestos project is proceeding with production scheduled to begin in early 1990 at a rate of 20,000 tonnes per year. This is expected to increase to 40,000 tonnes annually by 1992.
The wet process technology, owned by Cliff, produces a low- cost asbestos fibre that reduces environmental health and safety concerns, the company says.
Bridge financing required for the completion of the project should be finalized this month. Long-term financing will be provided by the Atlantic Canada Opportunity Agency. The agency previously provided $8 million, or half the project cost, to Baie Verte on a grant basis.
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