Sumac facing cash flow crunch

Sumac’s management is of the opinion that enough gold and silver can be recovered from the partially processed heap leachable mine tailings to satisfy the requirements of its proposal to creditors. However, the company said it would require another production season to extract the gold and silver and generate sufficient cash flow to regain solvency and continue operating.

Although the company’s secured creditor offered to postpone its rights under the terms of the debenture for one year (to Dec 1, 1989), that offer is still subject to acceptance of the proposal by the preferred and unsecured creditors. Sumac plans a formal presentation of its proposal to these creditors shortly. If rejected by a cast of ballots at the creditors’ meeting, Sumac said it would then be in bankruptcy.

]]>