Denver — At its San Cristobal silver-zinc project in Bolivia,
The decision was made based on public statements about the financial conditions of the Washington Group.
The Idaho-based contractor has experienced liquidity problems resulting from its acquisition of Raytheon Engineers & Constructors and from substantial cost overruns and negative cash flow.
The company has filed suit against Raytheon, claiming the contractor misrepresented and withheld information regarding the purchase.
All of this leaves Apex Silver in a difficult position. The Denver-based company is trying to arrange financing for the US$430-million project, and having a solvent mining contractor is key to doing so.
Apex Silver is in negotiations with the governments of Bolivia and Chile regarding road construction, and is also negotiating a power supply agreement.
At the end of the first quarter, the company had US$50.4 million in working capital, plus US$54.4 million in cash and equivalents. To date, Apex has capitalized US$82.5 million for the San Cristobal project.
The company posted a loss of US$1.9 million (or 5 per share) for the first quarter, compared with a loss of US$723,000 (2 per share) in the first three months of 2000.
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