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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Date of Report)
JANUARY 30, 1998
COMMISSION FILE NUMBER 0-12207
PEGASUS GOLD INC.
(Exact name of registrant as specified in its charter)
PROVINCE OF BRITISH COLUMBIA NONE
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
601 W. FIRST AVE., SUITE 1500, SPOKANE, WASHINGTON 99201-3282
(Address of principal executive offices) (Zip Code)
(509) 624-4653
(Registrant's telephone number, including area code)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
On January 16, 1998, Pegasus Gold Inc. ("Pegasus") issued a news release
announcing that it and certain of its subsidiaries had filed voluntarily to
reorganize under Chapter 11 of the Bankruptcy Code to facilitate the
reorganization of the Company's core businesses and the restructuring of its
long-term debt and other liabilities. Petitions were filed in United States
Bankruptcy Court in Reno, Nevada on January 16, 1998. The United States
Trustee is Linda Ekstrom Stanley.
ITEM 5. OTHER MATTERS
On January 16, 1998, Pegasus received notification that an application was
being filed by the American Stock Exchange with the Securities and Exchange
Commission to strike the Company's common stock from listing and registration
on the Exchange based on the fact that Pegasus does not meet the continued
listing guidelines due to its operating results and financial condition. The
application has not been appealed.
On January 22, 1998, Pegasus received notification from the Toronto Stock
Exchange that the common shares of the Company were suspended from trading on
the Exchange effective immediately, due to Pegasus failing to meet the
Exchange's continuing listing requirements on the basis of the Company's
financial condition and operating results.
On January 30, 1998, Pegasus issued a news release announcing that its shares
reopened for trading on the Montreal Exchange. The Exchange had halted
trading on January 22, 1998 to review the Company's financial situation. The
exchange reinstated trading in the Company's common shares on January 30, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION, AND EXHIBITS.
(a) Financial statements - not applicable.
(b) Pro forma financial information - not applicable.
(c) Exhibits:
(99.1) News Release issued by the Company dated January 16, 1998.
(99.2) News Release issued by the Company dated January 30, 1998.
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FORM 8-K
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PEGASUS GOLD INC. (Registrant)
Date: January 30, 1998 By: /s/ Phillips S. Baker, Jr.
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Phillips S. Baker, Jr.
Vice President, Finance and Chief
Financial Officer
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EXHIBIT 99.1
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NEWS RELEASE
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PEGASUS GOLD INC. TO REORGANIZE UNDER CHAPTER 11
SPOKANE, WA. - JANUARY 16, 1998 - Pegasus Gold Inc. (PGU - Amex; TSE; ME)
announced today that it and certain of its subsidiaries filed voluntarily to
reorganize under Chapter 11 of the Bankruptcy Code, in Reno, Nevada, to
facilitate the reorganization of the Company's businesses and the
restructuring of approximately $183 million of long-term debt and revolving
credit, $14 million in trade debt, and $16 million in foreign currency losses.
"With gold prices at 18 1/2-year lows, there will not be sufficient cash flow
to service the Company's debt. We have been in discussions with the
revolving credit lending group since November to restructure the debt, but no
significant progress was being made in those discussions, it became clear
that to move the reorganization forward it would have to be done in a court
proceeding," said Werner G. Nennecker, President and Chief Executive Officer.
Mr. Nennecker continued, "I am convinced that the Company's foundation is
strong, and with the successful completion of this reorganization and gold
prices returning to historically higher levels, Pegasus can once again
establish its position in the gold industry and accomplish future gold
production growth."
Mr. Nennecker emphasized, "Daily operations will continue, our employees will
continue to be paid, and we will continue to produce gold. Pegasus has a
fiduciary responsibility to our creditors, vendors, employees, and
shareholders to maximize assets and to create an appropriate corporate
structure that will permit us to take greater advantage of high-growth,
high-return opportunities. We will continue to review each of our mine sites
to determine how best to maintain low cost mining operations and produce
gold."
Currently, the Company has approximately $16 million in available cash, and
most of the Company's assets are unencumbered. The Company's total
obligations are approximately $213 million, which consisted of: $68 million
under a revolving credit agreement; $16 million in foreign currency losses;
$14 million in trade and similar obligations; and $115 million of 6.25
percent Convertible Subordinated Notes due 2002.
The American Stock Exchange has determined to delist the Company as it no
longer satisfies the Exchange's continued listing guidelines. The Company is
not appealing that determination.
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Statements in this release which are not historical data are forward looking
and involve a number of risks and uncertainties, including but not limited to
the price of gold and other
commodities and currencies, production, construction and permitting or
regulatory delays, reserve estimation of tonnage, grade and metallurgical
recoveries, exploration success and reserve growth, litigation, capital
costs, and other risks that are detailed in the Company's SEC filings.
Pegasus Gold Inc. is an international gold mining company, headquartered in
Spokane, Washington. The Company carries out exploration internationally
through offices located in Santiago, Chile; and Panama City, Panama. The
common shares of Pegasus are traded under the symbol PGU on the Toronto and
Montreal stock exchanges. Options on the Company's common shares are traded
on the Chicago Board Options Exchange and the Montreal Exchange.
FOR FURTHER INFORMATION, CONTACT:
John W. Pearson
Vice President, Investor and Public Relations
509-624-4653
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EXHIBIT 99.2
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NEWS RELEASE
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PEGASUS GOLD INC. CONTINUES TO
TRADE ON THE MONTREAL EXCHANGE
SPOKANE, WA. - JANUARY 30, 1998 - Pegasus Gold Inc. (PGU - ME) announced that
its shares will reopen for trading on the Montreal Exchange today. The Company
and some of its subsidiaries filed voluntarily to reorganize under Chapter 11 on
January 16, 1998 and the Montreal Exchange had halted trading on January 22,
1998. The Company is proceeding with the reorganization of its businesses and
the restructuring of the outstanding obligations. While a plan of
reorganization is being put together, daily mining operations continue at the
Montana Tunnels, Diamond Hill and Florida Canyon mines. The Company expects to
produce in excess of 200,000 ounces of gold during the year at a total cash cost
of US$270 per ounce. Currently, the Company has approximately US$29 million in
cash, which is expected to meet its cash requirements through 1998.
"I am pleased that after reviewing the Company's situation, the Montreal
Exchange will reinstate trading in the Company's common shares," said Werner G.
Nennecker, President and Chief Executive Officer.
By statute, the Company, as Debtor, has the sole right during an initial 120-day
exclusive period to file a Plan of Reorganization. This initial period may be
extended in complex cases such as this, with the prior approval of the Court.
Statements in this release which are not historical data are forward looking and
involve a number of risks and uncertainties, including but not limited to the
price of gold and other commodities and currencies, production, construction and
permitting or regulatory delays, reserve estimation of tonnage, grade and
metallurgical recoveries, exploration success and reserve growth, litigation,
capital costs, and other risks that are detailed in the Company's SEC filings.
Pegasus Gold Inc. is an international gold mining company, headquartered in
Spokane, Washington. The Company carries out exploration internationally
through offices located in Santiago, Chile; and Panama City, Panama. The common
shares of Pegasus are traded under the symbol PGU on the Montreal Exchange. The
common shares also trade over the counter in the United States under the symbol
PSGQF.
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FOR FURTHER INFORMATION, CONTACT:
John W. Pearson
Vice President, Investor and Public Relations
509-624-4653
