Today's Sac BEE
Struggling mining firm sets
reverse stock split
By Norman D. Williams
Bee Staff Writer
(Published Dec. 10, 1998)
Brush Creek Mining and Development Inc., teetering
on the brink of insolvency, announced a 10-for-1
reverse stock split Wednesday that will allow its
shares to remain on the Nasdaq Stock Market.
The move, subject to shareholder approval at a
special meeting Dec. 23, would boost the value of
each Brush Creek share over the $1 mark, which is
the Nasdaq minimum. Exchange officials were
prepared to remove the company from the market,
effective Friday, if no action was taken to increase
the share price.
"We've been trading below a dollar a share for the
last 90 days," said Larry Stockett, chief executive
officer of the Grass Valley firm. "The only way to get
it above that is a reverse split."
Stockett, who rode into town as a business-rescuing
"white knight" in November, plans to seek
shareholder direction on a number of issues at the
special meeting. They include proposed settlements
on a number of lawsuits in which the firm is involved.
Among the major issues to be put to shareholders is
a proposal to increase the authorized shares of
company stock from 10 million to 50 million. That
would allow it to proceed with planned acquisitions
of U.S. Cement in Las Vegas and McLaughlin
Engineering and Mining Inc. in Temecula.
Wednesday's stock split announcement is just the
latest dramatic move by Brush Creek, which has
recently undergone financial and managerial turmoil.
The company laid off its entire work force of 30 in
July and is embroiled in a dispute with Volcanic
Resources, its primary investment partner.
Sierra County, in October, seized the company's
bank account and mining equipment because of
unpaid property taxes.
Stockett, who is also CEO of U.S. Cement, hopes to
turn Brush Creek's fortunes around by effectively
converting Brush Creek into a holding company, with
the mining operation, the cement company and
McLaughlin becoming subsidiaries.
The tax write-offs enjoyed by Brush Creek would help
boost profits at U.S. Cement and allow it to seek
public investment. Stockett wants other mining
operations to pay for the rights to operate at Brush
Creek's mines.
Stockett has been working without compensation
and said he plans to continue doing so until the
company has its first profitable quarter. |
