Princeton’s debenture holders asked to convert to equity

An extended slump in the price of copper has prompted Princeton Mining (TSE) to seek changes to the terms of its convertible debentures.

Holders will be asked to convert the $12 million in debentures plus the $600,000 in interest due at the end of September into common shares and warrants.

The conversion price under the proposal is set at 55 cents per share, or 1,818 shares per $1,000 in principal, plus 91 shares for each $50 in interest due.

In addition, for each $1,000 debenture, the company will issue 182 share purchase warrants exercisable at 80 cents per share for a period of three years.

Under existing terms, the 10% debentures are convertible at $2.75 per share and are due March 31, 1996.

The proposal is subject to the approval of two-thirds of the debenture face value and must be ratified by common shareholders.

If converted, the issued shares of the company would increase to about 58.8 million from the current 35.9 million shares.

Princeton continues to work with the British Columbia Job Protection Commission to defer certain operating costs at its Similco open-pit copper mine near Princeton.

The largest saving under the plan would come from a proposed deferral of half the mine’s power costs, which total about $900,000 per month. During the first six months of 1993, Similco lost $7.3 million on about 28.1 million lb. of copper production.

Princeton also reached an agreement with Black Hill Minerals, giving that company the option to buy Teranov Mining. Teranov operates a seasonal asbestos wet milling plant in Baie Verte, Nfld.

Black Hill can buy a half interest in Teranov up to Oct. 15, 1993, and holds an option to acquire the balance up to Dec. 1, 1994.

Terms of the agreement call for Black Hill to advance Teranov $200,000 for working capital upon execution of the agreement, as well as advance additional loans to the company of up to $800,000 following exercise on the first option.

On completion of the restructuring, Princeton hopes to raise additional funds to explore the Similco property, as well as its project in Chile.