Sunshine’S Reverse Split Will Help Company Stay Listed On Nyse

Sunshine Mining and Refining will reduce the amount of company stock by eight-fold to boost share prices above the $1 mark.

The reverse stock split, announced Monday, will help the company meet updated New York Stock Exchange requirements and arrange financing for a new mine in Argentina.

“It’s a necessary step in a difficult market,” said Pennaluna & Co. broker Tim Major. “It’s a lot easier to raise money when you’re trading above $1 per share.”

Sunshine stock closed Monday at 37-1/2 cents per share.

The reverse split, which takes effect Aug. 6, will decrease the number of outstanding shares to 34.6 million. Shareholders with 800 shares, for example, would have 100 shares after the reverse split takes effect. The new shares will open for trading at eight times the previous closing price, Major said.

Sunshine President John Simko was not available for comment Monday. But a company news release said boosting share prices was necessary to keep the stock trading on the New York Stock Exchange. New listing standards require a minimum price of $1.

Sunshine is also trying to raise $124 million to build an open-pit mine in Argentina.

The company has received an operating permit from the Argentine government, paving the way for Sunshine to turn the underground Pirquitas mine into a low-cost producer of silver and tin, Simko said in an interview last week.

Sunshine expects the Pirquitas mine to produce about 9 million ounces of silver a year as an open-pit mine. The project will bring the company back into the black, Simko predicted.

Sunshine lost $64.8 million last year, largely due to the write-down of its flagship Sunshine Mine in the Silver Valley.

The company has contracts with two London banks to develop a financing strategy for the Pirquitas project. Once financing is available, it will take about 18 months to put the mine into production, Simko said.

Montana Tech officials are planning a multimillion-dollar center focusing on better ways to obtain minerals and other natural resources.

The center would house the school’s research projects and the Montana Bureau of Mines and Geology. An expanded Mineral Museum would be part of the 100,000-square-foot project in Butte.

Easier and less-destructive ways of obtaining natural resources are needed because demand for resources is not declining, even though environmental concerns are rising, the officials said. Many of the projects would involve mining, though forestry and wind energy would also be featured.

“The theme is finding socially and environmentally acceptable ways of producing natural resources,” chancellor Frank Gilmore said.

Thomas Smrekar, the Potlatch employee credited with helping the company expand its oriented strand board production, will retire at the end of the year.

Potlach shipped more than 1 billion board feet of OSB last year.

“He was the spark plug that made the business grow and develop,” said company spokesman Mike Sullivan.

Smrekar oversaw the construction of two OSB plants in Minnesota in the early 1980s and acquisition of a third plant.

OSB was developed at Potlatch’s Lewiston plant, evolving from a plywood hybrid the company called “ply-strand.”

In OSB, flakes of wood are “oriented” in different directions, making a strong, light panel product. The process allows the company to use different wood species in the same product, Sullivan said.< “OSB has become the standard for exterior sheathing for roofs and walls,” he added.

Smrekar, 57, is vice president of Potlatch’s wood products group in Spokane. He will be replaced by Richard Kelly.

The wood products group had sales of $520 million last year. Products include lumber, plywood, and particle board as well as OSB.

Boise Cascade’s decision to not close a Yakima plywood plant and an Elgin, Ore., sawmill figured into the company’s jump in earnings.

The company’s second quarter income of $59.1 million included $35 million that been set aside last year to close the two facilities, said Mike Moser. When the company decided to keep the plants open, the money was counted as income.

The Associated Press contributed to this report.