Following a recent reorganization, Musto Explorations (VSE) is once again trading on the Vancouver Stock Exchange. The company ran into trouble in mid-1987 when it was forced to close its Apex Mine near St. George, Utah, because of technical problems and low gallium prices. Musto sold the mine in 1989 after wholly owned subsidiary St. George Corp., which operated the Apex, was forced into bankruptcy. Hecla Mining (NYSE) purchased the facility for US$5.5 million and Musto has proceeded to pay off creditors and re-organize the company.
Musto had three series of debentures outstanding. Holders of the debentures recently agreed to convert the principal amounts into an aggregate of 21.5 million common shares of the company.
As a result, Musto now has 39.55 million shares outstanding, $3.8 million in the bank, and a Series D debenture issued in the principal amount of $1.34 million.
The debenture was issued under the reorganization plan to a previous debenture holder which, as a fund, could not hold more than 10% of the issued and outstanding shares of the company. The debenture does not pay interest and is convertible at 30 cents per share to June 1, 1994. Musto has the option to force conversion after two years.
Lutz Klingmann, president of the company, noted the company directors had not yet come to any decisions on what direction Musto will take. He indicated his preference would be to acquire producing or near-production situations.
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