Northern Orion emerges from debt

Northern Orion Explorations (NNO-T) has eliminated all of its outstanding indebtedness by converting $6.9 million in secured convertible notes held by Miramar Mining (MAE-T) into shares at 15 apiece.

The conversion comprised the distribution of 48 million of Miramar’s 70 million Norther Orion shares. The move effectively wraps up Northern Orion’s restructuring. Since late 1999, the company has eliminated more than $50 million in debt from its balance sheet.

Northern Orion retains stakes in three key assets:

• a 29% interest in the Agua Rica copper-gold-molybdenum project in Argentina, which hosts measured and indicated resources of more than 1.7 million tonnes running 0.43% copper, 0.03% molybdenum, 0.17 gram gold and 3 grams silver per tonne, at a 0.2% copper cutoff grade;
• the wholly owned San Jorge property also in Argentina, where measured and indicated resources run 381,400 tonnes grading 0.39% copper and 0.15 gram gold ata cutoff of 0.25% copper; and
• a half-interest in the Mantua copper-gold prospect in Cuba, which contains 7,525 tonnes running 2.74% copper a ta a 0.7% copper cutoff.

Under a previous option deal, Miramar sold the 48 million shares to Robert Cross, former Vice Chairman of Yorkton Securities, at 8 each for proceeds of about $3.8 million. The option granted voting rights over the shares and in late June, Cross was elected chairman of Northern Orion.

Miramar retains about 22 million shares in Northern Orion plus a net smelter and proceeds royalty agreement giving it the right to receive 50% of the proceeds of the sale of any interests in the Agua Rica and Mantua properties, and a 2.5% net smelter royalty on Northern Orion’s share of any production from the Agua Rica and Mantua properties, to a maximum of $15 million.