Sterling Mining bidding begins
| April 22, 2010 9:00 PM
An auction to acquire up to 100 percent interest in Sterling Mining 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 Silver Opportunity Partners - participated in the auction, but Alberta Star officials said later that afternoon they were "unsuccessful in its 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 minimum overbid was set to $12.5 million; which was the same amount Minco offered in December 2009.
Higdem said a breakup fee of $250,000 to Alberta Star was worked into the bidding as a resolution
to the Oct. 30 Binding Term Sheet. This past fall Alberta Star initially made an $11.75 million agreement and said in a press release that it would "acquire up to 100 percent interest in Sterling and its assets and provide for financing of Sterling's ongoing operations."
Higdem said the offer did not allow for complete satisfaction for creditors, which is a necessary component of the bankruptcy proceedings, and was not accepted by the bankruptcy court.
Sterling and the winning bidder will now work toward creating a reorganization plan to go about satisfying Sterling's debt.
Once completed, Higdem said the plan will be presented to Chief U.S. Bankruptcy Judge Terry L. Myers in early June, where it will then be subject to other court hearings.
Sterling, which has been in Chapter 11 bankruptcy since February 2009, and Sunshine Precious Metals Inc. engaged in a lengthy legal battle over the rights to the Sunshine Mine in Big Creek. Ultimately it was Sterling that took possession of the property on Aug. 20, 2009, after a ruling by Myers.
Since then, Sterling has been on site evaluating the Sunshine Mine in order to prepare for the aforementioned auction.