February 2, 2010 in Business

Judge delays Sterling Mining auction

Company controls lease of Sunshine Mine
By The Spokesman-Review
 

A federal bankruptcy judge has given Sterling Mining Co. another four months before the company, which controls the lease of the historic Sunshine Mine near Kellogg, is auctioned off.

The sale was scheduled for this week, but Judge Terry Myers agreed Tuesday to give Sterling until June 4 to file a plan of reorganization.

Sterling asked the judge for an extension to learn how much it owes to the Coeur d’Alene Tribe and the U.S. Environmental Protection Agency in royalties and penalties. According to court documents, Sterling must pay a yet-to-be determined penalty on $382,000 in past-due smelter royalties from the underground silver mine.

The tribe and EPA each submitted claims for $1.8 million to the Bankruptcy Court. Sterling officials are disputing that amount. A three-day court hearing on the claims is set to begin March 10 in Boise.

Two Canadian mining companies have submitted bids for Sterling, whose primary asset is the lease of the Sunshine Mine. Sterling reopened the closed mine but filed for bankruptcy shortly afterward.

The 125-year-old mine is a storied part of Idaho’s past, producing more than 360 million ounces of silver.

It was the site of one of the nation’s deadliest hard-rock mine disasters. Ninety-one miners perished during the 1972 Sunshine Mine fire.

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

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