Beleagured
The loan is tied to William’s Bjorkdal gold mine in northern Sweden. The principal was due in mid-December; following that date, the company received a formal notice of default from its lenders, though all have so far declined to enforce their rights.
Failure to repay the principal also resulted in cross-over defaults on two separate, but connected, loans totalling US$35 million. One of these is related to another troubled gold operation — Jacobina in Brazil — which, because of high production costs, will shortly be closed (T.N.M., Nov. 23-29/98).
William is seeking written waiver agreements from each of the lenders, and hopes to restructure the debt. To this end, it is receiving financial advice from Nesbitt Burns.
The Bjorkdal mine produced 17,601 oz. gold in the third quarter of 1998 at a cash cost of US$231 per oz. — this was 9,299 oz. and US$56 per oz. below budget, reflecting the treatment of low-grade coarse ore screened off previously to augment head grades.
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