May 7, 2010 in Business

Judge OKs Sunshine Mine sale

Firm paying $24 million for Sterling stock, assets
By The Spokesman-Review
 

Sterling Mining Co. can sell its interest in the Sunshine Mine to pay its creditors, U.S. Bankruptcy Court Judge Terry Myers ruled Thursday.

The ruling allows Silver Opportunity Partners LLC of New York to purchase the historic silver mine near Kellogg. Last month, the partnership bid $24 million for Sterling’s stock and assets, which include a lease-purchase option for the Sunshine Mine. Silver Opportunity plans to exercise the $5 million purchase option in the near future.

“We’re very excited about being the owners of the Sunshine Mine,” said Mark Wallace, the partnership’s transition director.

Cash from $24 million asset sale should cover Sterling’s debts and might even produce a pay-out for the company’s stockholders, said Ford Elsaesser, Sterling’s attorney.

“It’s a great result, not only for the creditors and shareholders, but for the Silver Valley,” he said.

Silver Opportunity Partners is part of the Electrum Group of Companies, which invests in gold, silver and platinum mines.

Wallace offered no timeline for reopening the Sunshine Mine, saying his company needed to evaluate capital needs and environmental responsibilities at the property.

The mine closed in 2008, and Sterling filed for bankruptcy the next year.

Attorneys for Sunshine Precious Metals, the mine’s owner, had objected to the sale of the lease-purchase option. They testified that Sterling Mining broke its lease agreement and couldn’t sell its financial interest in the mine.

In Thursday’s ruling, Myers said Sterling had met court-imposed conditions for regaining control of the lease. A separate ruling in U.S. District Court affirmed that view.


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