As a result of a planned restructuring, Galactic Resources (TSE) announced it will not meet the Jan. 31 interest payment on its outstanding 7% exchangeable debentures.
Peter Guest, president, said the company has about US$31.5 million of the debentures outstanding, representing Galactic’s only remaining long-term debt. Although no details of the restructuring have been released, Guest said he expected the company to be debt-free on completion while retaining an undisclosed amount of working capital.
The exchangeable debentures are convertible into 16.15 common shares of Newmont Mining and 50.72 common shares of Galactic per US$1,000 in face value. The Newmont shares are held in trust by the company and the debentures are exchangeable until maturity on April 13, 1995.
At current market prices, the debentures have a conversion value of about US$746 per US$1,000 in face value.
Galactic currently has about 62 million shares outstanding and retains its 50% interest in the Ivanhoe joint venture in Nevada and its 100% owned Summitville mine in Colorado.
Galactic’s latest financial results (for the nine months ended Sept. 30, 1991) outlined a cash operating loss of US$4.3 million from its Summitville operation and operating cash flow of US$395,000 from its interest in the Ivanhoe joint venture.
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