Breakwater Resources (BWR-TWR-T) is scrapping its plans to buy a controlling interest in Bolivian zinc producer Minera.
The company attributes the decision to delays caused by Minera’s failure to restructure, and a subsequent inability on the part of the players to renegotiate the deal in response to falling zinc prices in autumn and early winter.
In September 1997, Breakwater agreed to buy a 60.3% interest in Minera for $11 million in cash, payment of US$2.2 million over five years, 11 million Breakwater shares (which peaked above $9 during late September and have recently traded below $3) and 4 million share purchase warrants. That interest dropped to 58.8% in November 1997.
Through its subsidiaries, Minera controls seven producing operations. In Bolivia, it operates four zinc mines (three are wholly owned; the fourth is half-owned), a heap-leach silver tailings recovery operation (roughly an 80% interest) and a gold mine (95% interest). In Argentina, 350 km from Buenos Aires, Minera owns and operates a zinc mine and smelter. The company also holds exploration properties in Bolivia.
As of Sept. 30, 1996, Minera’s assets totalled US$143.5 million and its debt stood at US$28.1 million. The company earned US$5.5 million on revenue of US$164 million for the year ended Sept. 30, 1996, during which time it produced 129,261 tonnes zinc, 23,762 tonnes lead and 5.5 million oz. silver in concentrates.
Be the first to comment on "Breakwater nixes Bolivian zinc deal"