May 1, 2010 in Idaho
Mine bidder has deep pockets
Company sees promise of vitality at Sunshine
A private partnership that bid $24 million for the Sunshine Mine is owned by the New York-based Electrum Group of Companies, a worldwide investor in gold, silver and platinum mines.
The mine’s sale must still be approved by the U.S. Bankruptcy Court. But if Silver Opportunity Partners LLC is successful in purchasing the historic underground mine, the company would bring deep pockets and a wealth of technical expertise to the operation, said Mark Wallace, the company’s transition team director.
“We think the Sunshine Mine has the potential to come back to a place of vitality,” Wallace said Friday.
But he offered no timeline for reopening the Sunshine.
“For us, it’s important not to come in and overpromise,” he said. “We pride ourselves in doing things right – what’s right for the mine and what’s right for the community. We want to be a long-term sustainable presence, rather than a flash in the pan.”
In an auction last week, Silver Opportunity Partners outbid two Canadian companies for the assets of Sterling Mining Co., the Sunshine Mine’s former operator.
Sterling filed for Chapter 11 bankruptcy last year. The company’s biggest asset is a lease and purchase-option for the Sunshine Mine, which is owned by Sunshine Precious Metals. If the sale of Sterling’s assets is approved by the court, Sterling will be able to repay its creditors, a company attorney said last week.
On Monday, U.S. Bankruptcy Judge Terry Myers will consider Silver Opportunity Partners’ $24 million bid as part of Sterling’s reorganization plan. The plan faces opposition from Sunshine Precious Metals, which is disputing Sterling’s right to sell its financial interest in the mine.
The Sunshine Mine is one of North America’s richest silver strikes. During 125 years of operation, it produced more than 360 million ounces of silver. “Everyone in the industry knows about the Sunshine Mine,” Wallace said.
The mine employed more than 200 people before it closed in 2001. Sterling reopened the mine in 2007, but shut it down after experiencing financial problems.
The Sunshine Mine’s longevity interested Electrum, Wallace said. The privately held company is owned by Thomas Kaplan, an Oxford-educated entrepreneur with financial interests in mining and natural gas.
In the mining world, Kaplan is perhaps best known as the former chairman of Apex Silver Mines Ltd., the company that discovered the San Cristobal silver deposit in Bolivia. Kaplan left Apex in 2004. He’s also the founder of Panthera Corp., a charity devoted to preserving tigers, lions and other big cats and their ecosystems.
Electrum Group, which formed about a decade ago, has mining interests in 20 countries, Wallace said. The company’s portfolio also includes a financial stake in NovaGold Resources of British Columbia.
Wallace said that Silver Opportunity Partners will offer jobs to the Sunshine Mine’s caretakers if the sale goes through. Extensive studies of the mine’s capital needs and environmental responsibilities would come next.
“We hope that everyone else will be patient as we take stock and do our comprehensive analysis,” Wallace said.
Community hopes, meanwhile, are pinned to an eventual reopening of the mine. The mining industry provides some of the highest-paid jobs in Shoshone County, where unemployment hit 15 percent in March.
“This area still has a lot of minerals,” said Jon Cantamessa, chairman of the Shoshone County Board of Commissioners.