December 12, 2009 in Business

Sterling Mining up for auction

Canadian firms have made bids
By The Spokesman-Review

A bankrupt company that controls the lease for the historic Sunshine Mine will be sold at a Feb. 1 auction.

Sterling Mining Co. expects to raise at least $12.5 million through the sale – enough to repay secured creditors, but leaving only about $500,000 for dozens of vendors owed at least $6 million, Sterling officials wrote in the company’s Chapter 11 reorganization plan.

Two Canadian mining firms have already submitted bids for Sterling. Offers must be received by the U.S. Bankruptcy Court in Coeur d’Alene by Jan. 25.

Sterling’s primary asset is the lease of the Sunshine Mine near Kellogg. The 125-year-old mine is a storied part of Idaho’s history, producing more than 360 million ounces of silver. It was also the site of one of the nation’s deadliest hard-rock mine disasters. Ninety-one miners perished during the 1972 Sunshine Mine fire.

Sterling Mining Co. filed for bankruptcy in March, less than two years after reopening the mine. During the company’s short boom, 200 people worked at the underground silver mine. Sterling’s abrupt demise left miners scrambling for other work in rural Shoshone County. Some relocated to Nevada to find jobs.

Minco Silver Corp., of Vancouver, B.C., which is one of Sterling’s debtors, submitted the $12.5 million bid for the company. The bankruptcy court has also received an $11.75 million bid from Alberta Star, another Canadian firm.

Sterling’s secured creditors include:

•Minco Silver, owed $6.3 million for loans to the company.

•The federal government and the Coeur d’Alene Tribe, owed $382,000 in royalty payments from the mine.

•Sunshine Precious Metals, owed $80,000 in back rent for the Sunshine Mine.

•Shoshone County, owed $70,000 for unpaid property taxes.

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