In a press statement that is printed in full on page three, the company announced a series of “significant positive developments.... That effort has resulted in a proposed financing that would allow the Company to recommence mining operations during 2009.”
The copper mine and mill began operations in 200X, but the mining operations closed in early 2008. At the time, company officials said that the milling operation was taking longer than anticipated, leaving the company unable to meet its delivery obligations without buying copper on the expensive open market.
Since the mine closure, the milling operations have continued. However, the parent company commenced an insolvency proceeding in Canada in late 2008.
The Lisbon Valley Mining Co., LLC consented to an involuntary Chapter 11 bankruptcy proceeding on May 4, 2009. As a result, the Company “secured financing from Renewal Capital LLC for funding during the Chapter 11 case and to provide financing to allow the Company to exit Chapter 11 and implement its mine plan.”
“The Chapter 11 filing and the financing we have obtained are the next steps in our plan to restart the mine,” said Robert Frayser, General Manager of the Company. He further commented, “we are excited about our future.”
Company officials indicate that “the mining plan will result in consistent production rates, positive cash flows under a range of copper prices, and an expected mine life of 18 years.
“Production of LME Grade A Cathode of 15 to 18 million pounds per year at planned mining and processing rates is anticipated.
“The mining operations at Lisbon Valley are in the process of restarting with necessary steps being taken to insure proper production and the long term sustainability of the mine as well as ensuring a safe working environment.
“Since the appointment of Robert Frayser as the company general manger in February, 2008, the company has produced positive cash flow for each of the preceding 15 months, reducing debt by approximately $18.65 million notwithstanding low copper market prices, higher bulk commodity prices, economic uncertainty, and the financial condition of its parent corporation.
“Approximately $7.5 million of debt retired over the past 15 months was “past due” vendor debt affecting local economy and communities. New management has placed a priority on paying these vendors as quickly as possible.
“The balance of the debt repayment was paid to Investec Bank UK Limited for previous Constellation Copper Corporation and Summo USA defaulted hedge positions. Management will continue to work with the Company’s vendors and all of its constituents and wishes to maintain their ongoing support while the Company works through the Chapter 11 process.”
Lisbon Valley Mining LLC owes more than $1.2 million in unpaid property taxes to local taxing entities.
Robert Frayser said, “We have spent the past nine months evaluating different mining scenarios, project improvement opportunities, and cost control alternatives. Extensive and detailed due diligence work has validated our efforts and we look forward to being a viable company resulting in a positive impact to our communities, counties, and the State of Utah.”