Yet again,
The Idaho-based silver company does not have the resources to pay the notes, also known as Eurobonds. The March 2000 maturity date had already been pushed back several times.
The company is also negotiating to restructure its debt with the holders of the Eurobonds and the 10% senior convertible notes, due in mid-November 2002. While no agreement has been reached, Sunshine anticipates that restructuring will transfer a substantial interest in the company to debt-holders. If the restructuring is not successful, the company may be forced to file for bankruptcy protection.
Sunshine raised US$30 million from the 8% Eurobonds in 1996 and another US$15 million from the 10% Eurobonds in 1997. The company used the funds to develop and upgrade existing mining facilities at the Sunshine mine in northern Idaho, particularly the West Chance deposit. They were also used to delineate the Pirquitas silver-tin property in northwestern Argentina.
To date, Sunshine has outlined proven and probable reserves totalling 23.9 million tons grading 4.9 oz. silver per ton, 0.33% tin and 0.57% zinc. Unfortunately, the company has been unable to raise the money to place the project into production. As a result of the recent troubles, the property was placed on the selling block.
The company is also having difficulty maintaining listing requirements with the New York Stock Exchange. Despite an 8-for-1 share roll-back to maintain a share price of at least US$1, the shares have steadily fallen to US34 apiece. The company is not within the listing requirements of a US$50-million market capitalization.
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