Today's GV Union
"White Knight" comes to rescue of failing mine; Brush Creek fires
president
By S.E. Humphries - Thu, Nov 19, 1998
Facing imminent demise, the Brush Creek Mining and Development Co. has dumped James Chapin as its
president and chief executive officer and replaced him with a Las Vegas entrepreneur.
Larry Stockett is president of U.S. Cement Co., a new company based in Las Vegas that Stockett claims will
revolutionize the cement industry.
Brush Creek, which abandoned its Grass Valley offices on East Main Street when Sierra County seized all of its
assets in October, made the announcement in a press release Monday. Since then, its stock has climbed from
around $0.25 a share to this morning's high of $0.97.
Brush Creek directors said in the release that Stockett stepped in as a "White Knight" and "has agreed to use
his best efforts to resolve the current legal and financial problems of Brush Creek."
The release also states that "the board is well aware of the lack of certainty about the success of Mr.
Stockett's plans," but goes on to say the plan was the only one "which has any realistic possibility of restoring
value to the shareholders."
The press release does not state when, if ever, mining will resume on any of the company's mining leases in the
Alleghany area.
Stockett has been staying at the Holbrooke Hotel since being named to the top spot Sunday evening. He and
stockholders and consultants from McLaughlin Engineering and Mining, one of several companies in which
Stockett holds interests, planned to visit the Alleghany area today.
"Our engineering team is fully capable of dealing with the problems Brush Creek has," Stockett said. "One
option is to get other gold-mining companies to joint venture with Brush Creek."
Brush Creek ended its mining operations in July when its minority partner, Volcanic Resources, defaulted on a
promised $9 million injection of cash. Stockett said he has reopened talks with Volcanic Resources, which he
said "had lost confidence in working with Jim Chapin."
"That is why the board concluded to ask Chapin to leave," Stockett said.
Chapin could not be located for comment.
Stockett said he became president for two reasons. One was to gain a publicly traded mining company. He
hopes to use the listing to gain investors for his fledgling cement company, which has connections to a
company in India. "Brush Creek has a $25 million tax-loss-carry-forward" that both he and the Indian company
can use, he said.
Eventually, if Stockett's plans succeed, Brush Creek would become a holding company with the mining
company, the cement operation and the Las Vegas engineering firm as subsidiaries.
The deal worked out between Stockett and Brush Creek calls for the entrepreneur to work without pay until the
company has achieved its first quarterly after-tax profit. As an incentive, he will receive one million shares of
Brush Creek restricted stock, if shares achieve $5 per share for 10 consecutive trading days.
Stockett has said that he hopes to turn around the company by Christmas. |
