Dallas company bids $24M for Sterling Mining, company that controls Sunshine Mine

Dallas company bids $24M for Sterling Mining

SPOKANE, Wash. — A Dallas-based company has bid $24 million for Sterling Mining Co., which controls the Sunshine Mine near Kellogg, Idaho.

Silver Opportunity Partners LLC beat out two Canadian competitors for Sterling’s stock and assets. The sale must be approved by U.S. Bankruptcy Court Judge Terry Myers. A hearing is set for May 3.

“This is really good news for the Silver Valley,” said Ford Elsaesser, Sterling’s attorney. “There’s a reasonable certainty that all creditors will be paid in full. And presumably at some point, the mine will reopen.”

In northern Idaho’s Shoshone County, about 15 percent of the work force was unemployed last month.

Sterling filed for Chapter 11 bankruptcy just over a year ago. Its most valuable asset is the Sunshine Mine’s lease and an option to buy the underground silver mine.

Creditors will be paid from the sale of Sterling’s stock and assets. Elsaesser said stockholders might also get payment for their shares.

The Sunshine Mine once employed more than 200 people in a resource-dependent economy and produced more than 260 million ounces of silver over 125 years.

It closed in 2001 amid low silver prices and heavy debts, then reopened in 2007, with Sterling paying $10,000 per month to the mine owner, Sunshine Precious Metals. But the company filed for Chapter 11 bankruptcy within a year.

On a related front, Sunshine Precious Metals is appealing a previous decision by Myers that Sterling lawfully regained control of the Sunshine Mine lease, arguing that Sterling vacated the lease in 2009 and doesn’t have the authority to sell it.

“I’m not going to let these guys acquire this mine without a helluva fight,” said Robert Mori, Sunshine Precious Metals’ owner.

Mori also said Sterling is responsible for $4 million in damage to an escape route shaft that collapsed and must be operational before the mine can reopen.

Information from: The Spokesman-Review, www.spokesmanreview.com