That’s It for Teddy Bear

The board of one of Canada’s older mining companies, Teddy Bear Valley Mines, is recommending the company be wound up and dissolved.

The company has called a special meeting to be held on May 25 where shareholders can vote on the proposal.

There are more than 8.7 million common shares issued and outstanding, but the company is no longer listed on any exchange.

Teddy Bear was incorporated under the Business Corporations Act (Ontario) on July 6, 1929, and became a reporting issuer under the act on June 17, 1983.

Teddy Bear’s last producing asset was the Holloway underground gold mine in northern Ontario, near the Quebec border. In its heyday, Holloway had been owned 86.79% by Newmont Mining (NMC-T, NEM-N) with the balance held by Teddy Bear.

The timing was bad: opened in 1996, Holloway wound up being a high-cost mine in a low-price gold environment, and was put on care and maintenance in April 2006.

On Jan. 1, 2006, Teddy Bear received a final notice of default for not meeting a December cash call, and had its stake in the Holloway joint venture reduced to a 3.3% net profits royalty interest.

This dilution triggered a default clause in a convertible debenture agreements with Canadex Resources (CDX-T, CDXFF-O), which owns 49% of Teddy Bear.

In total, as of February 2007, Teddy Bear owed Canadex $10 million and couldn’t repay it, having written off the entire value of the Holloway joint venture.

In November 2006, after raising $100 million, St Andrew Goldfields (sas-t, sasxf-o) bought Newmont’s interest in Holloway, its neighbouring Holt-McDermott gold mine and a large land package in the area for US$40 million plus a net smelter return royalty.