Rayrock makes cash offer to debenture holders

A move to strengthen its financial position is the reason Rayrock Yellowknife Resources (TSE) is making a cash offer to debenture holders.

The company says it is offering to all holders of its $24.5 million 7.5% convertible subordinated debentures, to make a cash payment of 15% of the face amount of the debentures to holders who convert their debentures into subordinated voting shares at the existing conversion price of $10 per share by Feb. 1.

The offer is conditional on holders representing at least 50% of the total debentures outstanding accepting this offer. Rayrock says holders representing 56% of the outstanding debentures have already agreed to accept this offer.

Holders are entitled to tender the debentures for redemption on March 15, 1994. The debentures will mature March 15, 1997, and the Company can call for their redemption under certain conditions.

Meanwhile, Rayrock reports that its share of gold production from its three Nevada gold mines (Pinson, 26.5% interest; Dee, 44% interest; and Marigold, 66.7% interest) was about 82,000 oz. in 1992 at an average direct cash operating cost of less than US$240 per oz.

Minera Rayrock (TSE), Rayrock’s 63.6% owned (fully diluted) vehicle for mining activities in Chile and Costa Rica, intends to place its Ivan Copper Project, in Chile, into production in 1994 with construction work anticipated to begin in the second quarter of 1993, subject to arranging financing. The initial exploration program last fall at Minera’s optioned Sierra Valenzuela property in Chile encountered significant copper mineralization, Minera says. The property is 40 km from the Ivan Copper project. Drilling has resumed at Sierra Valenzuela.