Stephen Sorensen, Pioneer’s new chairman, president and chief executive officer, said these operations and lower gold prices have “undermined shareholders’ confidence” in the company’s ability to meet its financial obligations.
Specifically, he mentioned a 52,000-oz gold loan to the Chase Manhattan Bank of Canada and interest on a $12-million convertible loan owing to its largest shareholder, Pegasus Gold (TSE).
Pegasus owns about 9% of the company’s 22.8 million issued and outstanding shares. Sorensen recently acquired about 5% of Pioneer through purchases on the open market. The shares are trading at 70 cents in a 52-week range of 60 cents to $4.25.
Although Sorensen reports that Pioneer has enough cash to meet its day-to-day requirements and the year-end interest payment to Pegasus, he will be seeking to restructure the corporate debt so the company can meet its repayment obligations.
Sorensen also plans to add new directors from the mining and financial sector to fill vacancies left by the departure of several directors, including Robert Willis, former president and chief executive officer. The board now consists of Sorensen, Stewart Blusson and Wayne Smith, all original founders of the company.
The new management team intends to seek joint venture partners for the 100%-owned Puffy Lake mine in Manitoba and the 100%- owned Bonito gold and silver project in New Mexico. The company will continue to operate the seasonal Stibnite gold mine in Idaho, but intends to seek joint venture partners for all its existing properties. The Premier gold mine is operated by Westmin Resources (TSE).
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