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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (3822)	9/19/2001 3:19:22 PM
From: long-gone	Read Replies (1) \| Respond to of 8010

Monday September 17, 11:08 am Eastern Time Press Release SOURCE: Sunshine Mining and Refining Company Sunshine Mining Announces Sale of Silver Refinery, Closes Second Amended and Restated Credit Agreement DALLAS--(BUSINESS WIRE)--Sept. 17, 2001--Sunshine Mining and Refining Company (OTCBB:SSMR - news) announced today that it had sold an option to acquire its silver refinery, antimony plant, and tailings pond at the Sunshine Mine in Kellogg, Idaho to Formation Capital Corporation (TSE:FCC - news). The initial option payment was $200 thousand. In order to maintain the option, which can be extended until June 2003, Formation can make quarterly payments, which will total an additional $2.3 million over the period. At any time, Formation can exercise its option to acquire any or all of the optioned facilities. At that time, the option payments convert to payments on a note in the same amounts as scheduled for the option payments. Formation can prepay the obligation by paying an aggregate of $1.6 million in cash (including the option payment already received) by March 2002, or a total of $2.0 million in cash by December 2002. Sunshine has sold several other assets from the property over the past few months and expects to continue to sell assets that aren't vital to the mine's operation, should it be reopened in the future. Sunshine further announced that it had closed the Second Amended and Restated Credit Agreement with affiliates of its principal shareholders. The new credit agreement replaces the Company's previous agreement with the same lenders. The initial commitment under the agreement is $6.5 million, of which $6.2 million is currently outstanding. The lenders, at their option, can increase the commitment to $8.0 million. Advances under the facility are subject to a 5% commitment fee (including amounts outstanding at closing) and bear interest at 15%. A ``participation'' provision in the Credit Agreement provides for payment to the lenders of the first $10 million of proceeds (above the amount of principal and interest due) from any proceeds received by the Company on the sale of certain assets, the receipt of any judgment or award, or upon the issuance of any debt or equity securities. (The asset sales discussed above are specifically exempted from this provision.) If more favorable terms to refinance can be found within 90 days of the date of the Agreement (September 7, 2001), then advances under the Credit Agreement can be prepaid with no participation payment. The Company will review alternative debt or equity financing that would permit it to avoid the participation obligation, but is not yet in receipt of any such proposal. The Company's current strategy is to hold its large, undeveloped Pirquitas silver mine until silver market conditions improve. Pursuant to the Company's independent bankable feasibility study, Pirquitas has 129 million ounces of silver reserves, plus significant tin and zinc reserves. It is envisioned as an open pit operation producing 11 million ounces of silver, 3200 tonnes of tin and 16,300 tonnes of zinc per year. The independent feasibility study forecasts that pre-production capital and working capital required to develop the property will total approximately $140 million, and net cash cost of production will be approximately $1.53 per ounce of silver. If the Company's lenders subscribe to the full amount of the optional commitment under the Second Amended and Restated Credit Agreement, and other asset sales are completed as envisioned, the Company believes it will have the resources to hold Pirquitas until at least the third quarter of 2002. The above statements regarding Sunshine's estimated or anticipated results are ``forward-looking statements'' within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Actual results could differ materially from those projected, whether as a result of changes in the market prices of precious metals, uncertainties inherent in exploration and development activities, risks inherent in estimating precious metals reserves, the effects of environmental and other governmental regulations, risks inherent in the ownership or operation of mining properties in foreign countries, or as a result of other risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, or geologically related conditions). Sunshine Mining news releases and information can be accessed on the Internet at: www.sunshinemining.com. -------------------------------------------------------------------------------- Contact: Sunshine Mining and Refining Company, Dallas William W. Davis, 214/265-1377 biz.yahoo.com