Stick a fork in Teddy Bear; it’s done

The board of one of Canada’s older junior mining companies, Teddy Bear Valley Mines, is recommending the company be wound up and dissolved.

The company has called a special meeting to be held on May 25 where shareholders can vote on the proposal.

There are 8,748,022 common shares issued and outstanding, but the company is no longer listed on any exchange anywhere.

Teddy Bear was incorporated under the Business Corporations Act (Ontario) on July 6, 1929, and became a reporting issuer under the act on June 17, 1983.

Teddy Bear’s last producing asset was the Holloway underground gold mine in northern Ontario, near the Quebec border. In its heyday, Holloway had been owned 86.79% by Newmont Mining (NEM-N, NMC-T) with the balance held by Teddy Bear.

Opened in 1996, Holloway wound up being a high-cost mine in a low-price gold environment, and was put on care and maintenance in April 2006.

On Jan. 1, 2006, Teddy Bear received a final notice of default for not meeting a December cash call, and had its stake in the Holloway joint venture reduced to a 3.3% net profits royalty interest.

This dilution triggered a default clause in a convertible debenture agreements with Canadex Resources (CDX-T), which owns 49% of Teddy Bear.

In total, as of February 2007, Teddy Bear owed Canadex $10 million and couldn’t repay it, having written off the entire value of the Holloway joint venture

In November 2006, after raising $100 million, St Andrew Goldfields (SAS-T) bought Newmont’s interest in Holloway, its neighbouring Holt-McDermitt gold mine and a large land package in the area for US$40 million plus a net smelter return royalty.