A U.S. subsidiary of Musto Explorations (TSE) may have to file for bankruptcy. St. George Mining’s Apex project in Utah has been shut down since Sept 1, 1987, and the company is currently seeking relief from its creditors.
Operations were terminated because of technical problems in the germanium refinery and the concurrent weakness in the gallium market. “These factors contributed to the company’s shortage of working capital and continue to make completion of the plant, capital projects and the restart of operations impossible,” says Musto President, H. Lutz Klingmann.
Debenture holders are being asked to convert their debentures into common shares and, if they agree, Musto will seek an investor to purchase a majority interest in St. George Mining “on terms fair and reasonable to the shareholders of the company.”
“The sale has somewhat been hampered by the lack of favorable consensus about the medium-term markets for gallium and germanium and by the relatively high costs associated with mining and processing of these primary metals,” notes Klingmann.
Four employees are currently on site, providing security and financial services. Work continued on several projects during the past year, including the installation of a belt filter; a prototype study was also initiated on a germanium solvent extraction process. Both these items were designed to increase recoveries and reduce operating costs. No further work will be carried out at this time, the company notes.
The company reported a loss for 1987 of $5.7 million or 32 cents per share before the extraordinary writedown of assets. After writing down the assets to net realizable value, the loss was $26.3 million or $1.46 per share.
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