Bankruptcy sets workers adrift

Norman Welch wonders if regular e-mails can take the place of the daily conversations with his teenage sons, or make it easier for his 4-year-old to adjust to an absent dad.

In mid-March, the former Silver Valley miner is moving 1,000 miles away to work at a Nevada gold mine. His wife, Trina, will remain in Osburn, Idaho, where she runs a beauty salon, with the couple’s five kids.

It isn’t an ideal situation, but Welch sees no alternative. He’s been out of work for five months, when he lost his mechanic job at the Sunshine Mine.

“Nevada was my last resort, but there are no jobs here,” Welch said.

Sterling Mining Co. filed for bankruptcy this week, less than two years after reopening the historic Sunshine Mine. During Sterling’s short boom, 200 people worked at the mine. The company’s rapid rise and abrupt fall has left many of its former workers in Welch’s shoes – unemployed and looking for work during one of the worst job markets in recent memory.

Welch left his job as a juvenile probation officer with Shoshone County to work at the underground silver mine. The lure was a $36,000 annual salary, with the promise of regular bonuses.

“It sounded like it would be a good, long-term job,” he said. But the work only lasted 15 months. “If I knew what I know now, I would have never left my original job,” Welch said.

When Sterling started laying off workers last fall, Welch initially counted himself lucky not to get a pink slip in the first few rounds. Now, he wonders. A proposed merger that was supposed to supply Sterling with new capital fell through. Meanwhile, the local job market deteriorated, and other mines stopped hiring.

Monique Hayes, Sterling’s spokeswoman, said a series of problems led to the company’s current financial troubles.

Financing fell through, and the mine failed to meet its silver production targets. Sterling’s management had counted on a merger with Minco Silver of Vancouver, B.C., to bring in the millions needed to keep the mine operating until it could turn a profit, Hayes said.

“The failed merger with Minco put us in a situation that we were unable to work our way out of,” she said.

Minco became one of Sterling’s creditors. Company officials said Sterling defaulted on a $5 million loan.

Sterling Mining Co. filed for bankruptcy protection late Tuesday. Officials said the Chapter 11 filing will allow Sterling’s officers to remain in control of the company while payment schedules are worked out with creditors.

Sterling owes more than $10 million to creditors, according to the bankruptcy filing. The company listed its assets in the $10 million to $50 million range.

Roger Van Voorhees, who recently became Sterling’s president, is the only remaining member of Sterling’s board of directors. The six other board members resigned in late February, when the company also gave up its lease on the Sunshine Mine.

Van Voorhees is among 200-plus creditors listed in the bankruptcy filing. Sterling owes him nearly $35,000 in director fees, plus $280,000 from a loan last summer, according to bankruptcy documents.

Welch, meanwhile, has a job lined up at the Cortez Mine, located about 250 miles southwest of Elko. He’ll work four days on, four days off, keeping his expenses low by living in a camper. After he and his wife get caught up on their bills, he plans to fly home during some of his days off.

Welch coached one of his son’s basketball teams during the past season. He’ll miss being part of his kids’ daily lives, but he and his wife decided it was better not to uproot their family.

“We’ll have the computer,” he said, “and we’ll get a Web cam.”