Thursday Sept. 19, 1991
Cassiar Mine is on the ropes
By: Sarah Davidson-Star Reporter
The owners of the Cassiar asbestos mine in northern British Columbia are taking drastic action to keep the mine afloat, including a private placement to raise $15 million on the Toronto Stock Exchange. Princeton Mining Corp. warns if these steps aren't effective, the Cassiar mine will close within one year.
In a news release issued today, Princeton says Cassiar's new McDame underground asbestos mine can be conducted on an economical basis only is Cassiar "is able to effect a significant restructuring of its activities and affairs."
"Cassiar has begun to negotiate the required restructuring terms," the release continues. "If these negotiations are unsuccessful, mine development needed to sustain operations will cease and the developed ore will be depleted within a year."
Production problems and a two-week strike by the United Steelworkers of America last spring caused overruns and a drop in fibre output and revenues. Princeton has no money in the kitty to bail Cassiar out. The company is already under financial pressure from a continuing strike at its Similco copper mine in British Columbia, and start-up costs associated with subsidiary asbestos mine in Baie Verte, Newfoundland. The $15 million private placement is the company's second in six months. Last April, Princeton raised $12 million, increasing Cassiar's long-term debt to $51.6 million. At the same time, the bank requested further cash collateral to secure its reclamation letter of guarantee, reducing Cassiar's working capital by $3.5 million.
The $15 million raised by this private placement will replenish that, said Lianne Gulka, corporate communicator for Princeton.
A meeting takes place today between Princeton and representatives of Cassiar's United Steelworkers of America local. There are 330 unionized mineworkers at Cassiar and an undermined number of contractors. Cassiar is a one-industry town with a population of 1,200. No one was available from either the union or the mine to discuss these latest developments. Princeton (PMC) trades on the Toronto Stock Exchange. The price for its common shares on Sept. 16 was $1.70
Contributed by Simone Rowlinson
This page was last edited Wednesday, September 19, 2012
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