Gold producer St Andrew Goldfields (TSE) has written down the value of its producing and non-producing mining properties, and written off related development, preproduction and exploration costs, for a total (writedown and writeoff) value of $45.5 million.
For the year ended Dec. 31, 1990, the company reported a loss of $52.3 million ($3.69 per share) compared with a loss of $1.1 million (six cents per share) for all of 1989.
The company’s Stock Twp. mine east of Timmins, Ont., produced 27,295 oz. gold in 1990. The mine entered production in October, 1989.
Financing to develop the mine came from a 7-year 25-million Swiss franc convertible bond issue (about $22 million) bearing an annual 5.75% interest rate. A consortium of Swiss banks arranged the funding.
St Andrew, in its 1990 annual report, said that because of the writedown and writeoff, the company’s net worth is a non-compliance of the covenant. “St Andrew has commenced discussions, at the time of issuing its annual report, with the trustee to explore alternatives,” wrote the company. At the company’s recent annual meeting in Toronto, President Herbert Gasser said that talks were continuing with the trustee and that he was hopeful of a resolution in the near future.
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