SNS Silver clarifies status of Sunshine Mine http://finance.yahoo.com/news/SNS-Silver-Clarifies-Status-iw-15317196.html;
US Silver dials down mining costs at the Galena http://finance.yahoo.com/news/US-Silver-Announces-Q1-2009-bw-15314231.html?.v=1
21.5.09
19.5.09
In Weird Turn, Bankruptcy Judge Returns Sunshine Mine Lease To Sterling
Wallace, Idaho – A bankruptcy judge has returned to Sterling Mining Co. its lease of the Sunshine silver mine that Sterling attempted to abandon three months ago, infuriating mine-owner Sunshine Precious Metals Inc. and prompting SNS Silver Corp., which had assumed responsibility for the mine's care and maintenance on Feb. 19 and negotiated a lease assumption with SPMI, to immediately withdraw from the property.
“We were on our way to getting this mine reopened with SNS, and now we've got to turn it over to these losers and let them screw it up again,” SPMI president Robert Mori told The Wallace Street Journal, adding, “Sterling was out of it and they're in default now. They said they were turning the mine over back in February and they asked me to waive my right to 30-days' notice, which I did. Now that's being used against us.”
Sterling notified SPMI on Feb. 19 that it was vacating the mine, and filed for bankruptcy a week later. Judge Terry Myers wrote May 15 that “the acts allegedly constituting termination are equivocal. By their terms, they were not complete and required additional future action. While possession of the leasehold realty was delivered to SPMI, there was no termination of the Lease consistent with the Lease’s own terms or Idaho law generally.”
Late Monday, SNS Silver's attorney, Bradley J. Dixon, notified Sterling attorney Ford Elsaesser by letter that, “Given the significant out of pocket costs SNS is expending on a monthly basis, SNS does not wish to continue its possession of the mine under the current state of affairs and does not consent to a two-month transition period as implied by (Sterling) during the recent (bankruptcy) hearing.” Dixon said SNS expects to be reimbursed $750,000 for the three months it maintained the Sunshine mine, plus $500,000 in lease payments it has made to SPMI. He also asked that Sterling provide plans to re-take possession of the mine by 10 a.m. Wednesday.
“This just breaks my heart,” SNS CEO David Greenway told The Wallace Street Journal. “Sterling's position has damaged our ability to raise funds to reopen the crown jewel of North America's silver mines in a timely and prudent manner,” Greenway said, adding, “If Sterling has the wherewithal to resume the holding costs at Sunshine and to reimburse us what we've spent keeping the mine in a turn-key condition, they've certainly kept it a secret from everyone. We're forced by the bankruptcy court to vacate the Sunshine, and the mine will begin deteriorating in a hurry with the fans, the water and the pumps turned off by the utility companies. This does irreparable harm not just to the Sunshine, but to Sunshine's labor force, and to the Silver Valley.”
SNS Silver owns the adjacent Crescent silver mine and developed a Canadian N.I. 43-101-compliant resource estimate of about 10.2 million oz/Ag during a recently concluded drilling program. SNS also contracted with Behre Dolbear to reaffirm its resource estimate at the Sunshine, lasted reported to be in excess of 250 million oz/Ag in all categories.
Sterling CEO Roger Van Voorhees – sole survivor of a revolving door of Sterling board members that includes ousted CEO Ray DeMotte, ousted interim CEO Ken Berscht, Stillwater Mining Co. manager Kevin Schiell, U.S. Silver Corp. founder John Ryan, SNS CEO Greenway, and former SPMI general manager Andrew Grundman – told The Wallace Street Journal he still hopes for some peaceful resolution to the Sunshine situation.
“Mistakes were made by everybody and I'm trying my best to do right by everybody,” Van Voorhees said. “We did not have a good relationship with Sunshine Precious Metals and I think they're overstating the holding costs at the mine,” he said.
During DeMotte's tenure, Sterling leased the Sunshine from SPMI in mid-2003 and began an extensive rejuvenation of the underground and surface works, reopening the facility to silver production in December 2007. One year ago, Sterling's board sacked DeMotte and by September of last year commenced shuttering the mine. Vancouver explorer Minco Silver negotiated to merge with Sterling in July 2008 but backed out after advancing $5 million to Sterling as part of a merger package priced at about $60 million.
In court filings, Minco asserts that Sterling assigned its lease of the Sunshine to Minco as security for the loan. However, SPMI's Mori said Sterling neither sought nor received permission to assign the lease as provided for in the 2003 agreement. Dr. Ken Cai, Minco's CEO, told The Wallace Street Journal that he was pleased with the ruling but needed time to review it. Minco Silver established a $500,000 escrow account at a Spokane, Wash., title company to provide for Sterling's interim costs should the judge rule in Sterling's favor.
Minco also obtained a temporary restraining order barring Sterling from disposing of any of its assets, including the Sunshine mine, a few days after Sterling surrendered the property and before the bankruptcy filing.
Mori, however, told The Wallace Street Journal he didn't think a future relationship between SPMI and Minco is likely. “It's not going to happen. They lied to me and sent their lawyers after me after saying they wouldn't,” Mori said. “After Sterling fell apart I went into business with SNS Silver in good faith and they're the only people I will deal with.”
“We were on our way to getting this mine reopened with SNS, and now we've got to turn it over to these losers and let them screw it up again,” SPMI president Robert Mori told The Wallace Street Journal, adding, “Sterling was out of it and they're in default now. They said they were turning the mine over back in February and they asked me to waive my right to 30-days' notice, which I did. Now that's being used against us.”
Sterling notified SPMI on Feb. 19 that it was vacating the mine, and filed for bankruptcy a week later. Judge Terry Myers wrote May 15 that “the acts allegedly constituting termination are equivocal. By their terms, they were not complete and required additional future action. While possession of the leasehold realty was delivered to SPMI, there was no termination of the Lease consistent with the Lease’s own terms or Idaho law generally.”
Late Monday, SNS Silver's attorney, Bradley J. Dixon, notified Sterling attorney Ford Elsaesser by letter that, “Given the significant out of pocket costs SNS is expending on a monthly basis, SNS does not wish to continue its possession of the mine under the current state of affairs and does not consent to a two-month transition period as implied by (Sterling) during the recent (bankruptcy) hearing.” Dixon said SNS expects to be reimbursed $750,000 for the three months it maintained the Sunshine mine, plus $500,000 in lease payments it has made to SPMI. He also asked that Sterling provide plans to re-take possession of the mine by 10 a.m. Wednesday.
“This just breaks my heart,” SNS CEO David Greenway told The Wallace Street Journal. “Sterling's position has damaged our ability to raise funds to reopen the crown jewel of North America's silver mines in a timely and prudent manner,” Greenway said, adding, “If Sterling has the wherewithal to resume the holding costs at Sunshine and to reimburse us what we've spent keeping the mine in a turn-key condition, they've certainly kept it a secret from everyone. We're forced by the bankruptcy court to vacate the Sunshine, and the mine will begin deteriorating in a hurry with the fans, the water and the pumps turned off by the utility companies. This does irreparable harm not just to the Sunshine, but to Sunshine's labor force, and to the Silver Valley.”
SNS Silver owns the adjacent Crescent silver mine and developed a Canadian N.I. 43-101-compliant resource estimate of about 10.2 million oz/Ag during a recently concluded drilling program. SNS also contracted with Behre Dolbear to reaffirm its resource estimate at the Sunshine, lasted reported to be in excess of 250 million oz/Ag in all categories.
Sterling CEO Roger Van Voorhees – sole survivor of a revolving door of Sterling board members that includes ousted CEO Ray DeMotte, ousted interim CEO Ken Berscht, Stillwater Mining Co. manager Kevin Schiell, U.S. Silver Corp. founder John Ryan, SNS CEO Greenway, and former SPMI general manager Andrew Grundman – told The Wallace Street Journal he still hopes for some peaceful resolution to the Sunshine situation.
“Mistakes were made by everybody and I'm trying my best to do right by everybody,” Van Voorhees said. “We did not have a good relationship with Sunshine Precious Metals and I think they're overstating the holding costs at the mine,” he said.
During DeMotte's tenure, Sterling leased the Sunshine from SPMI in mid-2003 and began an extensive rejuvenation of the underground and surface works, reopening the facility to silver production in December 2007. One year ago, Sterling's board sacked DeMotte and by September of last year commenced shuttering the mine. Vancouver explorer Minco Silver negotiated to merge with Sterling in July 2008 but backed out after advancing $5 million to Sterling as part of a merger package priced at about $60 million.
In court filings, Minco asserts that Sterling assigned its lease of the Sunshine to Minco as security for the loan. However, SPMI's Mori said Sterling neither sought nor received permission to assign the lease as provided for in the 2003 agreement. Dr. Ken Cai, Minco's CEO, told The Wallace Street Journal that he was pleased with the ruling but needed time to review it. Minco Silver established a $500,000 escrow account at a Spokane, Wash., title company to provide for Sterling's interim costs should the judge rule in Sterling's favor.
Minco also obtained a temporary restraining order barring Sterling from disposing of any of its assets, including the Sunshine mine, a few days after Sterling surrendered the property and before the bankruptcy filing.
Mori, however, told The Wallace Street Journal he didn't think a future relationship between SPMI and Minco is likely. “It's not going to happen. They lied to me and sent their lawyers after me after saying they wouldn't,” Mori said. “After Sterling fell apart I went into business with SNS Silver in good faith and they're the only people I will deal with.”
Farewell Northwest Orient Airlines
Northwest Orient and United were the big-ticket airlines to inhabit our airport in Spokane during the late 1960s. United went to places like Boise and Reno and Sacramento. Northwest, with their scarlet tails, flew to exotic places, like Minneapolis and Tokyo. Their Lockheed Electra took you to the Twin Cities (MSP); their DC-7Cs and B-707-320Bs took you over the oceans. When they retired their Electras, the 727s took over on the short hauls.
There was something hugely romantic about Northwest, until you actually flew them. Flying on Northwest during the late 1960s and early 1970s was just a touch less fun than dental surgery. They flew to a lot of places other airlines did not dare to go, including China, but the saying back and up through the late 1990s then was, "If the tail is red, take a train instead."
A travel agent, unaware of our prejudices, put us on a Northwest flight to Beijing six years ago, from Spokane through Portland and Narita. We were treated with a courtesy and respect in Coach that one would have expected from First Class three decades ago. The seat was comfortable, the cuisine superb, the beers were free.
So I took another flyer, on Northwest, this time to Europe. Same splendid treatment, same comfort.
One of the pilots and a cabin crew member were taking five in the galley up front of the SLF's chambers, and on my way back from the head, I asked them, "What has happened to this airline?"
They said that about five years ago (this would have been 1999 or so, during NWA's bankruptcy) management and the unions sat down to figure out how to make the airline work. Everybody gave an inch or two. Cabin Crew wanted X, pilots wanted Y, corporate wanted Z, and the SLF (self-loading freight) wanted A thru Z, and they emerged as an airline to be proud to fly for, and to ride on. And it shows. The FA's on Northwest are the best in the world.
So for more than half a decade, Northwest has been my airline of choice, they have not let me down, and I have logged nearly 1 million miles with them. I don't regret a single mile. Even in coach, I am treated like royalty.
Now Delta takes over Northwest. Delta has a tough act to follow. I hope they will learn from Northwest, how to earn a traveler's trust.
There was something hugely romantic about Northwest, until you actually flew them. Flying on Northwest during the late 1960s and early 1970s was just a touch less fun than dental surgery. They flew to a lot of places other airlines did not dare to go, including China, but the saying back and up through the late 1990s then was, "If the tail is red, take a train instead."
A travel agent, unaware of our prejudices, put us on a Northwest flight to Beijing six years ago, from Spokane through Portland and Narita. We were treated with a courtesy and respect in Coach that one would have expected from First Class three decades ago. The seat was comfortable, the cuisine superb, the beers were free.
So I took another flyer, on Northwest, this time to Europe. Same splendid treatment, same comfort.
One of the pilots and a cabin crew member were taking five in the galley up front of the SLF's chambers, and on my way back from the head, I asked them, "What has happened to this airline?"
They said that about five years ago (this would have been 1999 or so, during NWA's bankruptcy) management and the unions sat down to figure out how to make the airline work. Everybody gave an inch or two. Cabin Crew wanted X, pilots wanted Y, corporate wanted Z, and the SLF (self-loading freight) wanted A thru Z, and they emerged as an airline to be proud to fly for, and to ride on. And it shows. The FA's on Northwest are the best in the world.
So for more than half a decade, Northwest has been my airline of choice, they have not let me down, and I have logged nearly 1 million miles with them. I don't regret a single mile. Even in coach, I am treated like royalty.
Now Delta takes over Northwest. Delta has a tough act to follow. I hope they will learn from Northwest, how to earn a traveler's trust.
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