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Gold/Mining/Energy : Anvil Range Mining -- Ignore unavailable to you. Want to Upgrade?

To: jack BROSS who wrote (139)	6/15/1998 9:27:00 PM
From: Donald McRobb	Read Replies (1) \| Respond to of 143

The Northern Miner Volume 84 Number 16 June 15-21, 1998 MINING MARKETS & INVESTMENT NEWS -- Anvil Range hammered by metal prices Paul Gauthier, Quesnel, B.C. As a shareholder of Anvil Range Mining, I am wondering if you can tell me what has happened since its bankruptcy protection expired. It was granted a 10-day extension in mid-April 1998, but I have not heard or read anything since then pertaining to the matter. Anvil Range Mining obtained protection under the company's Creditors Arrangement Act by order of the Ontario Court Division, on Jan. 16, 1998. The company subsequently obtained orders extending its protection, but on April 21, the same court placed Anvil Range in receivership after several proposed restructuring plans failed to meet with the approval of the company's creditors. Accounting firm Deloitte & Touche was appointed interim receiver. Now that it is in receivership, the company is also under a cease-trade order from the Ontario Securities Commission for failing to make required filings. That order was continued on June 5. Anvil had been operating the Faro mine in the Yukon since November 1995, but when lead and zinc prices fell the company found itself in a cash squeeze. It suspended production in December 1996, started up again in November of the following year and then shut down again in early 1998. The Faro operation has been beset by poor cost performance, which arose from problems in making equipment available for stripping and from mechanical failures in the mill. When zinc and lead prices fell, the operation slid into the red. The company commissioned studies by Strathcona Mineral Services, with the object of redesigning the work flow at the mine to make the operation more efficient. Anvil Range's last estimates were that zinc needed to fetch US50 cents per lb. and lead, US35 cents per lb., for the mine to be profitable. The London Metal Exchange spot prices at presstime were US46 cents for zinc and US24 cents for lead. A high Canadian/U.S. exchange rate was also blamed for the 1996 closure, but with the Canadian dollar hovering below US70 cents, that explanation no longer washes. The most credible account of Faro's problems rests with a report by Strathcona, which found that the feasibility study on which Anvil Range had relied for its production decision was overly optimistic in its forecast of metal prices. Anvil Range's major debt is a pair of loans from Cominco (CLT-T) totalling $20 million that were advanced in August 1997 and March 1998 and bear interest at 8.5%. At the same time as it received court protection, Anvil Range deferred a $1.3-million interest payment on the loans. Complicating the relationship between debtor and creditor is Cominco's position as Anvil Range's largest shareholder; the base-metals giant owns about 28% of the outstanding shares, followed by South Korean conglomerate Hyundai, which has about 20%. Cominco's large holding dates back to February 1997, when Mineral Resources (MIC-T) mounted a takeover bid for Anvil Range. Cominco blocked the bid by taking a private placement of 4.1 million shares, which boosted its total holding to 5.7 million shares. Anvil Range's most recent financial statements, released last November, show that in the nine months ended Sept. 30, 1997, the company lost $11.6 million (36 cents per share) on revenues of $151 million. The loss included a writedown of $31 million on the Faro property. Anvil Range's balance sheet showed assets of $162.5 million, liabilities of $114.1 million and net working capital of $4.9 million.