Pegasus Raises Cash To Finance Mine Deal

Spokane-based Pegasus Gold Corp. has sold $100 million of convertible notes to pay for its takeover of Australian mining company Zapopan N.L.

The notes will pay 6.25 percent semiannually until April 30, 2002, when each will be converted into common stock worth $14.92.

Pegasus needs the cash to buy out the remaining 42 percent of Zapopan it does not already own. The two companies helped bring into production the Mount Todd gold mine, which is the largest mine in Pegasus’ portfolio.

Only a few of the notes were sold to U.S. investors. The bulk of the notes were sold in Europe, said John Pearson, director of investor relations for Pegasus.

The company appears in position to take on more debt. Pegasus’ long-term debt stood at $19 million, compared with $435 million in assets, at the end of 1994. That was the lowest level in years.

Pegasus will soon make a formal offer to Zapopan to buy the rest of the mine, Pearson said.

Pegasus stock closed Wednesday down 50 cents at $12.25.