Hello Hannah. Here's a story from a Yukon newspaper back in December that lends some perspective and is timely for this week's meeting:
Keno Hill/NDU Merger Finalized
A Whitehorse Star Archive story originally published December 22, 1997
The terms of a proposed merger between United Keno Hill Mines Ltd. and NDU Resources Ltd. were finalized Friday, the two companies announced.
Still requiring approval by shareholders, the courts and the Toronto Stock Exchange, a central part of the deal is meant to square off some $4 million in Yukon debt owed by United Keno.
NDU vice-president Doug Goss said this morning it's also the intent of the merged company to put United Keno's Elsa operation back into production in 1998.
He said the companies want to have everything complete, and all the approvals secure, by the third week of February.
The parties are confident they'll get the required approvals. They're also optimistic that once in place, a resuscitated United Keno will be able to attract the necessary financing to get the operation up and running, Goss said.
"From the financing point of view, we are very optimistic that the market is going to favorably look at the combined assets of the two companies."
NDU is the owner of a large proven ore reserve some 50 kilometres east of Elsa. It's known as the Marg deposit.
Goss is reluctant to say too much. He considers that the business of a new board, once it's appointed following the approval of the merger.
Goss did confirm that required start-up financing, including debt money, will be about $15 million.
He said the companies have explained to local creditors that they're proceeding with good intention, and that if creditors can be patient, they'll be paid.
"We are telling them we are optimistic we are going to have one of the best base metal companies in North America."
Discussions with the Yukon Energy Corp. have also been positive, he said.
The corporation threatened to turn off power to Elsa in late November if United Keno didn't make substantial payments toward its $428,000-bill. That could have led to potential environmental threats.
NDU told the corporation that it would pay for power it was using from then on, but that it's not in a position to pay the arrears of another company.
Once the merger is complete, said Goss, of course the debts and assets of both companies fold into one.
So far, the YEC is showing the same willingness to work with NDU and United Keno as other creditors.
Both the Al Archer group of companies, and the Jim Stephen group of companies, key companies behind NDU, have proven track records in the Yukon, he said. In the past 10 years, they've spent $60 million in the territory.
"And they paid every bill they have ever incurred," said Goss. They have every intention of doing exactly that with United Keno's debts, he added.
An attempt failed to secure some $3 million in front-end financing at the outset of the merger proposal through the sale of NDU shares to Yukon Gold and Mineral Development Co. to float the merger proposal.
But Goss said both companies decided instead to wait until the merger was in place, feeling confident that a merged company will be financially more attractive.
All content c1997 The Whitehorse Star
yukon.net:80/Star/Home.html |
