Apex is no more; Golden Minerals in its place

The final death throes of Apex Silver Mines are complete and the company will be reborn as Golden Minerals.

Golden Minerals announced its shares have begun trading over the counter and that it will be looking to secure a listing on the Toronto Stock Exchange and the National Stock Exchange in the near future.

Apex filed for Chapter 11 bankruptcy on January 12 of this year after massive debt forced it to sell its chief asset, the San Cristobal zinc and silver mine in Bolivia, to a partner on the project, Sumitomo of Japan.

The companies problems stemmed from a combination of the heavy amounts of leverage it used to build San Cristobal, a terrible hedge book connected to its borrowing, and collapsing metal prices.

Sumitomo took over Apex’s 65% interest, along with some of its liabilities and paid $27.5 million cash with the provision that Apex would file for Chapter 11 bankruptcy.

By filing Chapter 11 Apex was released and discharged from liabilities associated with the San Cristobal mine, including its guarantee of San Cristobal’s indebtedness.

Golden Minerals will take over an agreement between Sumitomo and Apex with respect to managing San Cristobal. Part of the Sumitomo’s acquisition was a provision that would pay Apex roughly $6 million to manage the mine for one year.

At the end of the 12 month period, Sumitomo can break the management agreement for a $1 million termination fee.

Golden Minerals says it will focus on some of the 45 exploration properties in South America and Mexico that were part of Apex’s portfolio.

It says two of the properties – the El Quevar silver project in Argentina and the Zacatecas silver and base metals project in Mexico — are in the intermediate to advanced stages of exploration.

Golden Minerals also says it will look to take advantage of the experience it gained from bringing San Cristobal into production by consulting on mine development for other companies.