Posted: Thursday, April 22, 2010 12:00 am
By SARAH ROSE FREDLUND/Hagadone News Network
An auction to acquire up to 100 percent interest in SterlingMining Co. along with its assets began at 8 a.m. on Wednesday,Sterling executive Robert Higdem said.
Three potential bidders - Alberta Star, Minco Silver and SilverOpportunity Partners - participated in the auction, but AlbertaStar officials said later that afternoon they were "unsuccessful inits bid to acquire Sterling."
The name of the winning bidder was not available late Wednesday,and Sterling officials could not be reached for comment.
According to the bidding procedures document, the minimumoverbid was set to $12.5 million; which was the same amount Mincooffered in December 2009.
Higdem said a breakup fee of $250,000 to Alberta Star was workedinto the bidding as a resolution to the Oct. 30 Binding Term Sheet. This past fall Alberta Starinitially made an $11.75 million agreement and said in a pressrelease that it would "acquire up to 100 percent interest inSterling and its assets and provide for financing of Sterling'songoing operations."
Higdem said the offer did not allow for complete satisfactionfor creditors, which is a necessary component of the bankruptcyproceedings, and was not accepted by the bankruptcy court.
Sterling and the winning bidder will now work toward creating areorganization plan to go about satisfying Sterling's debt.
Once completed, Higdem said the plan will be presented to ChiefU.S. Bankruptcy Judge Terry L. Myers in early June, where it willthen be subject to other court hearings.
Sterling, which has been in Chapter 11 bankruptcy since February2009, and Sunshine Precious Metals Inc. engaged in a lengthy legalbattle over the rights to the Sunshine Mine in Big Creek.Ultimately it was Sterling that took possession of the property onAug. 20, 2009, after a ruling by Myers.
Since then, Sterling has been on site evaluating the SunshineMine in order to prepare for the aforementioned auction.
