Denver — Financially beleaguered Crown Resources (CRRS-O) says it will not make its final US$15.4-million payment, defaulting on the 5.75% convertible subordinated debentures due Aug. 27.
The Denver-based junior has been in negotiations with the debenture holders and hopes to secure financing for at least US$3 million, which would be used to restructure the company.
Of the funds from the financing, 90% will be set aside in escrow to restructure the debentures and move forward on permitting the Crown Jewel deposit in northeastern Washington state.
Newmont Mining (NEM-N), which picked up a 54% stake in the deposit through its acquisition of Battle Mountain Gold, recently returned the property to Crown in exchange for a sliding-scale royalty interest.
Crown may still seek protection from its creditors and file a plan of reorganization under federal bankruptcy laws to complete the restructuring and re-capitalization of the company.
The debentures stem from the 1991 acquisition of the Kettle River mine, which Crown later sold to Echo Bay Mines.
The company recently had its shares delisted from the Toronto Stock Exchange because of its failure to maintain minimum listing requirements.
Crown retains a 42% interest in Solitario Resources (SLR-T).
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