Magma Copper says it is reducing employment by about 7% at its San Manuel, Ariz., division and laying off approximately 200 hourly rated employees and a yet to be determined but proportionate number of salaried employees.
President Burgess Winter, said, “we are evaluating all our operations and overhead units with a view to making them more productive and efficient.”
Production in the San Manuel mine will be reduced from 44,000 to 40,000 tons per day.
The Kalamazoo project, a major underground development project, will be put on hold for at least one year to postpone capital outlay and permit the utilization of skilled miners in other development projects. Magma files for financing in proposed recapitalization plan
Magma Copper recently announced the filing of registration statements with the Securities and Exchange Commission relating to a proposed offering of four issues of subordinated notes with an aggregate principal amount of approximately $210 million. Drexel Burnham Lambert will underwrite the offerings.
Net proceeds from the sale of the notes would be used in connection with a recapitalization plan in which Magma has the option to repurchase the 15% of its common stock (5.7 million shares) and $200 million face amount of its Class A preferred stock held by Newmont Mining Corporation.
The option to repurchase Newmont’s holding is exercisable through Nov 30, and provides for a closing, if the option is exercised, prior to Dec 31.
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