Chelsea and its wholly-owned U.S. subsidiary Chelsea Resources (U.S.) Inc. are currently under pressure from the Royal Bank of Canada to repay a $2.1 million debt load.
Chelsea said it is engaged in discussions with other parties to provide additional financing and, if necessary, alternate financing to replace the Royal Bank credit facility.
The Royal Bank has not seized any of the company’s assets or initiated any enforcement proceedings other than the demand for payment, Chelsea said.
A recently announced $1.25-million private placement arranged with Lufer Cor p. (a private company controlled by a Chelsea director) is on hold until Chelsea’s financial problems are resolved.
Meanwhile, the company’s Spotted Horse mine in Lewistown, Mont., continues to produce gold at the rate of about 500 oz per month and a new hoist is 95% complete.
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