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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From ______________________ to _____________________
Commission File Number 1-10012
SUNSHINE MINING AND REFINING COMPANY
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 75-2618333
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
877 W. Main Street, Suite 602, Boise, Idaho 83702
--------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number including area code (208) 345-0660
--------------
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Number of Shares Outstanding
Title of Each Class of Common Stock at August 15, 2000
----------------------------------- ---------------------------
Common Stock, $.01 par value 43,074,079
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SUNSHINE MINING AND REFINING COMPANY
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
June 30 December 31
2000 1999
--------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash investments $ 1,206 $ 628
Silver bullion 125 4,117
Accounts receivable 2,986 2,677
Inventories (Note 3) 2,058 2,826
Other current assets 762 787
--------- ---------
Total current assets 7,137 11,035
Property, plant and equipment, at cost 61,801 60,720
Less accumulated depreciation,
depletion and amortization (38,266) (37,623)
--------- ---------
23,535 23,097
Investments and other assets 2,820 2,888
--------- ---------
Total assets $ 33,492 $ 37,020
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 1,467 $ 1,634
Accrued expenses 6,165 3,562
Current portion, long term debt 40,145 31,518
--------- ---------
Total current liabilities 47,777 36,714
Long-term debt 0 11,720
Accrued pension and other postretirement benefits 4,368 4,445
Other long-term liabilities and deferred credits 2,748 2,861
Stockholders' equity (deficit):
Common stock -- $.01 par value;
75,000 shares authorized; shares issued:
June 30, 2000 - 43,074
December 31, 1999 - 39,255 437 393
Paid-in capital 729,928 725,840
Deficit (750,656) (743,843)
--------- ---------
(20,291) (17,610)
Less treasury stock, at cost:
June 30, 2000 - 579 shares
December 31, 1999 - 579 shares (1,110) (1,110)
--------- ---------
(21,401) (18,720)
--------- ---------
Total liabilities and stockholders' equity (deficit) $ 33,492 $ 37,020
========= =========
</TABLE>
See accompanying notes.
2
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SUNSHINE MINING AND REFINING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
June 30, 2000 and 1999
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
QTR YTD
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Operating revenues $ 6,596 $ 7,956 $ 13,773 $ 17,607
Mark to market gain (loss) 2 223 (164) 306
-------- -------- -------- --------
6,598 8,179 13,609 17,913
-------- -------- -------- --------
Costs and expenses:
Cost of revenues (6,336) (6,563) (12,704) (15,256)
Depreciation, depletion
and amortization (302) (339) (635) (687)
Exploration (452) (509) (827) (1,060)
Selling, general and
administrative expense (1,076) (1,283) (2,174) (2,497)
-------- -------- -------- --------
(8,166) (8,694) (16,340) (19,500)
-------- -------- -------- --------
Other income (expense)
Interest income 27 77 46 134
Interest and debt expense (979) (2,431) (3,915) (4,634)
Other, net (221) 744 (213) 1,097
-------- -------- -------- --------
(1,173) (1,610) (4,082) (3,403)
-------- -------- -------- --------
Net loss $ (2,741) $ (2,125) $ (6,813) $ (4,990)
======== ======== ======== ========
Basic and diluted loss
per common share: $ (0.06) $ (0.06) $ (0.17) $ (0.15)
======== ======== ======== ========
Weighted average common shares outstanding 42,641 34,524 41,078 33,525
======== ======== ======== ========
</TABLE>
See accompanying notes.
3
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SUNSHINE MINING AND REFINING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30
2000 1999
------- -------
<S> <C> <C>
Cash used by operating activities:
Net loss $(6,814) $(4,990)
Adjustments to reconcile net loss
to net cash used by operations:
Depreciation, depletion and amortization 635 687
Amortization of debt issuance costs, accretion of debt
discount and noncash interest 344 2,486
Investment gains -- (850)
Common stock issued for interest on
Senior Convertible Notes 573 750
Additional interest on 10% Notes payable
in common stock 1,362 --
Net (increase) decrease in:
Silver bullion 152 (330)
Accounts receivable (309) (406)
Inventories 768 1,206
Other assets and deferred charges 232 88
Net increase (decrease) in:
Accounts payable and accrued expenses 1,084 (1,977)
Accrued pension and other postretirement benefits (77) (162)
Other liabilities and deferred credits (113) (229)
------- -------
Net cash used by operations (2,163) (3,727)
------- -------
Cash provided (used) by investing activities:
Additions to property, plant and equipment (1,099) (1,483)
Proceeds from investments 3,840 1,503
------- -------
Net cash provided by investing activities 2,741 20
------- -------
Cash provided (used) by financing activities:
Proceeds from issuance of long term debt, net
of issuance costs -- 5,825
Proceeds from issuance of common stock upon
exercise of options and warrants -- 5
Other -- (5)
------- -------
Net cash provided by financing activities -- 5,825
------- -------
Increase in cash and cash investments 578 2,118
Cash and cash investments, January 1 628 1,412
------- -------
Cash and cash investments, June 30 $ 1,206 $ 3,530
======= =======
Supplemental cash flow information -
Interest paid in cash $ 92 $ 1,276
======= =======
</TABLE>
See accompanying notes.
4
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SUNSHINE MINING AND REFINING COMPANY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2000
1. LONG TERM DEBT AND FINANCIAL RESTRUCTURING NEGOTIATIONS
Sunshine Mining and Refining Company's ("Sunshine" or the "Company")
business and profitability have been negatively affected by an
extremely lengthy period of low silver prices. Since 1988, the price of
silver has averaged approximately $5.00 per ounce compared to an
average price of $9.50 per ounce over the prior 10 years. Given the
depressed price of silver compared to the Company's cash production
costs, the Company's operations have generated a negative cash flow for
several years.
In addition, the Company has been negatively affected by worsening
investor sentiment in the precious metals mining environment generally.
It has pursued various efforts to refinance its indebtedness and raise
capital to develop its major project, the Pirquitas Mine in Argentina.
Despite success in developing a bankable feasibility study that
demonstrates that Pirquitas is a very economic deposit even in the
currently depressed silver price environment, the Company has been
unable to access the capital it requires.
Further contributing to the Company's cash flow problems is the decline
in production at the Sunshine Mine. Absent a new discovery at the mine,
production is expected to continue to decline in the coming months.
As a result, the Company has been unable to pay principal and interest
on its indebtedness as it has come due or to refinance such
indebtedness. In order to permit time for renegotiation of its
obligations, the original maturity of the outstanding $26 million
principal amount of the 8% Senior Exchangeable Notes of March 21, 2000
(the "Eurobonds"), has been extended at various times to, most
recently, August 25, 2000. The 10% Notes are in default as the Company
did not pay the $1.4 million of additional interest that became due on
March 21, 2000, the full amount of interest due on April 1, 2000 nor
the $1.25 million quarterly prepayment due in May 2000. Currently,
approximately $12.3 million principal amount of 10% Notes are
outstanding. On July 15, 2000, the Company did not make the scheduled
interest payment on the 9% Convertible Subordinated Debentures due July
15, 2008 (the "9% Debentures").
The Company has been in negotiations with the significant holders of
the Eurobonds (who own $17.4 million of the total $26 million principal
amount outstanding) and the 10% Notes (who own the entire principal
amount of the 10% Notes) (together the "Significant Creditors") since
February 2000. It is anticipated that a restructuring, if successfully
accomplished, will result in a very substantial ownership of the
Company's equity by the holders of the Eurobonds and the holders of the
10% Senior Convertible Notes due November 24, 2002 (the "10% Notes").
This restructuring may require the Company to file for bankruptcy under
the U. S. Bankruptcy Code.
2. BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements
of Sunshine have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Certain previously reported
amounts have been reclassified to conform to the June 30, 2000
presentation. Operating results for the six-month period ended June 30,
2000 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2000. For further information, refer to
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the consolidated financial statements and footnotes thereto included in
Sunshine's report on Form 10-K for the year ended December 31, 1999.
3. INVENTORIES
The components of inventory consist of the following:
<TABLE>
<CAPTION>
June 30 December 31
2000 1999
------- -----------
<S> <C> <C>
Precious Metals Inventories:
Work in process $ 671 $1,376
Finished goods 159 107
Materials and supplies inventories 1,314 1,343
------ ------
$2,144 $2,826
====== ======
</TABLE>
6
<PAGE> 7
SUNSHINE MINING AND REFINING COMPANY
Management's Discussion and Analysis of Financial Condition
and Results of Operations for the
Six Months Ended June 30, 2000 and 1999
Certain matters discussed in this report are "forward-looking
statements" intended to qualify for the safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are all statements other than statements of historical fact,
including without limitation those that are identified by the use of the words
"anticipates," "believes," "estimates," "expects," "intends," "plans,"
"predicts" and similar expressions. Such statements address future plans,
objectives, expectations and events or conditions concerning various matters
such as mining exploration, capital expenditures, earnings, litigation,
liquidity and capital resources and accounting matters. Actual results in each
case could differ materially from those currently anticipated in such
statements, by reason of factors including without limitation, actual results of
exploration, silver prices, imprecision of reserve estimates, future economic
conditions, regulations, competition and other circumstances affecting
anticipated revenue and costs. Any forward-looking statement speaks only as of
the date on which such statement is made, and the Company undertakes no
obligation to update any forward-looking statement. Readers are cautioned not to
place undue reliance on these forward-looking statements. Readers should
carefully review the risk factors described in other documents the Company files
from time to time with the Securities and Exchange Commission.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 2000 was a deficit of $40.6 million. This
deficit includes the liability of $26 million for the Eurobonds, $12.3 million
for the 10% Notes and $1.5 million for the 9% Debentures. The Company did not
pay certain interest and principal payments when due on the 10% Notes and the 9%
Debentures. As a result, the 10% Notes are in default. The 9% Notes are in
default for non-payment of interest in July. The Eurobonds maturity was extended
at various times since their original maturity on March 21, 2000, most recently
to August 18, 2000.
Cash had declined to $1.2 million at June 30, 2000 and the Company
expects to continue to incur cash losses during the immediately foreseeable
period. Funding of these cash losses is dependent upon the outcome of
negotiations with certain of its creditors.
Sunshine Mining and Refining Company's ("Sunshine" or the "Company")
business and profitability have been negatively affected by an extremely lengthy
period of low silver prices. Since 1988, the price of silver has averaged
approximately $5.00 per ounce compared to an average price of $9.50 per ounce
over the prior 10 years. Given the depressed price of silver compared to the
Company's cash production costs, the Company's operations have generated a
negative cash flow for several years.
In addition, the Company has been negatively affected by worsening
investor sentiment in the precious metals mining environment generally. It has
pursued various efforts to refinance its indebtedness and raise capital to
develop its major project, the Pirquitas Mine in Argentina. Despite success in
developing a bankable feasibility study that demonstrates that Pirquitas is a
very economic deposit even in the currently depressed silver price environment,
the Company has been unable to access the capital it requires.
Further contributing to the Company's cash flow problems is the decline
in production at the Sunshine Mine. Absent a new discovery at the mine,
production is expected to continue to decline in the coming months.
As a result, the Company has been unable to pay principal and interest
on its indebtedness as it has come due or to refinance such indebtedness. In
order to permit time for renegotiation of its obligations, the original maturity
of the outstanding $26 million principal amount of the 8% Senior Exchangeable
Notes of March 21, 2000 (the "Eurobonds"), has been extended at various times
to, most recently, August 25, 2000. The 10% Notes are in default as the Company
did not pay the $1.4 million of additional interest that became due on March 21,
2000, the full amount of interest due on April 1, 2000 nor the $1.25 million
quarterly prepayment due in May 2000. Currently, approximately $12.3
7
<PAGE> 8
million principal amount of 10% Notes are outstanding. On July 15, 2000, the
Company did not make the scheduled interest payment on the 9% Convertible
Subordinated Debentures due July 15, 2008 (the "9% Debentures").
The Company has been in negotiations with the significant holders of
the Eurobonds (who own $17.4 million of the total $26 million principal amount
outstanding) and the 10% Notes (who own the entire principal amount of the 10%
Notes) (together the "Significant Creditors") since February 2000. It is
anticipated that a restructuring, if successfully accomplished, will result in a
very substantial ownership of the Company's equity by the holders of the
Eurobonds and the holders of the 10% Senior Convertible Notes due November 24,
2002 (the "10% Notes"). This restructuring may require the Company to file for
bankruptcy under the U. S. Bankruptcy Code.
The Pirquitas Mine is currently being maintained on a care and
maintenance program to reduce costs. The Company does not expect to be able to
access the capital required to develop this mine until after the completion of
the restructuring discussed in Note 1. At that point, the Company will review
its options with regard to potential development of the mine. Among the options
to be explored will be bringing in a joint venture partner with greater
financial resources than the Company to develop the Mine, or the sale of equity
and/or debt securities to finance development of the mine. If market conditions
do not improve significantly, no assurance can be given as to the availability
of financing for the development of the mine.
The Company is currently exploring an area of the Sunshine Mine which
management believes has the potential to contain significant additional silver
reserves. The results from this work are expected to be available by the end of
the third quarter. If the results do not reflect the probability of a
significant ore body in the eastern area of the mine, the Company expects to see
continued declines in the production of the remaining reserves at the Sunshine
Mine. As the production declines, it is expected that unit costs of production
will tend to increase. Should silver prices continue at their current levels,
cash flows from the mine will worsen as a result, which may necessitate the
evaluation of a shutdown of the facility.
Operating, Investing, and Financing Activities
Cash used in operating activities in the first half of 2000 was $2.2
million compared to $3.7 million in the first half of 1999. The $1.5 million
decrease was primarily due to changes in working capital components partially
offset by a $2.0 million increase in cash operating loss in the first half of
2000 to $3.9.
The increase in cash operating loss resulted primarily from a $3.8
million decline in operating revenue, a $164 thousand mark to market loss on
investment bullion in the 2000 period compared to a $306 thousand gain in the
prior period, $213 thousand of other expenses in the 2000 period and a $88
thousand decrease in interest income. These were partially offset by a $2.6
million decrease in cost of revenues, a $323 thousand decrease in general and
administrative expense and a $233 thousand decrease in exploration expense.
Investing activities in the first half of 2000 include proceeds of $3.8
million from the sale of investment silver bullion and $1.1 million of net
additions to property, plant and equipment. Investing activities in the first
half of 1999 included $1.5 million proceeds from investment recoveries, offset
by $1.5 million of net additions to property, plant and equipment primarily for
the development of Pirquitas.
RESULTS OF OPERATIONS
THE THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1999
Consolidated operating revenues decreased approximately $1.4 million
(17.1%) for the second quarter of 2000 compared to the second quarter of 1999.
The decrease in operating revenues primarily resulted from a decrease in average
price received per ounce of silver sold and fewer ounces being sold (1,209,000
ounces of silver at an average of $5.03 per ounce in the 2000 quarter compared
to 1,354,000 ounces at an average of $5.29
8
<PAGE> 9
per ounce in the 1999 quarter), a $222 thousand decrease in by-product revenue
and a $66 thousand decrease in recognized premium income on the sale of covered
calls on silver bullion held as an investment. Silver production totaled 996,695
ounces from 43,753 tons at 23.56 ounces per ton in 2000 versus 1,366,086 ounces
from 56,755 tons at 24.91 ounces per ton in 1999. The decrease in production was
primarily due to fewer productive stopes being available as mining proceeds to
the outskirts of the West Chance area. Silver sales volume was 212 thousand
ounces higher than production for the 2000 quarter due to the draw down of
work-in-process ("WIP") inventories as a result of the shutting down of the
antimony plant as discussed below. The decrease in by-product revenue was
primarily due to a 592 thousand-pound reduction in lead sales.
Mark to market gain on investment silver bullion was $223 thousand in
the 1999 period compared to a two thousand dollar gain in 2000.
Cost of revenues decreased $227 thousand (3.5%), from $6.56 million in
the second quarter of 1999 to $6.34 million in the second quarter of 2000. Total
production cost decreased by $1.1 million due to the reduction in tons and
ounces of silver produced during the 2000 quarter. These costs reductions were
offset by $836 thousand of costs associated with the reduction of WIP
inventories due to a change in the company's concentrate processing requirements
coordinated with its smelting customer. The change eliminates the need by the
Company to remove antimony from its concentrates prior to shipment, reducing the
amount of time WIP inventories are carried by the company. The price of antimony
has declined significantly recently. Thus, it is more advantageous to ship the
concentrates directly to the smelter without recovering the contained antimony,
as long as the smelter agrees to accept the concentrates with the additional
antimony. This will increase the impurity penalty charged by the smelter; but
will be offset by the savings from discontinuing the treatment of the
concentrates through the antimony plant. The antimony plant will be on a
stand-by mode in order to take advantage of potential improvements in the
antimony price or a change in the smelter requirements. It is anticipated that
all in-process material currently in the antimony plant will be processed by the
end of July and the clean-out of the plant should be completed during the month
of August.
Net cash operating costs increased $0.60 per ounce to $4.95 per ounce
of silver primarily due to fixed costs being spread over fewer ounces and a
$0.09 per ounce decrease in by-product credits. These costs were partially
offset by reduced per ounce smelter costs. Smelter costs are lower due to
improved grades for both silver and lead concentrates produced and reduced tons
of silver and lead concentrate production in 2000, partially offset by the
increase in impurity penalties discussed above.
Selling, general and administrative expense declined $206 thousand due
to a variety of cost reductions.
Interest income decreased $50 thousand due to lower average invested
cash balances.
Interest and debt expense decreased $1.5 million primarily due to the
amortization in 1999 of the discount feature associated with the 5% Convertible
Notes issued in January 1999, the amortization of debt discount and issuance
costs for the Eurobonds in the 1999 quarter and lower outstanding balances on
the Company's debt.
Other, net for the 2000 quarter includes fees and expenses related to
attempted financing transactions and asset sales. The income in the 1999 quarter
of $744 is primarily due to gains on certain investments sold.
THE SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
1999
Consolidated operating revenues decreased approximately $3.8 million
(21.8%) for the first half of 2000 compared to the first half of 1999, while
mark to market losses on investment bullion totaled $164 thousand in 2000
compared to a $306 thousand gain in
9
<PAGE> 10
1999. The decrease in operating revenues primarily resulted from a decrease in
the average price received per ounce of silver sold and a decrease in ounces
sold (2,502,772 ounces of silver at an average of $5.05 per ounce in the 2000
period compared to 3,039,942 ounces at an average of $5.24 per ounce in the 1999
period), a $442 thousand decrease in by-product revenue and a $89 thousand
decrease in recognized premium income on the sale of covered calls on silver
bullion held as an investment. Silver production totaled 2,265,572 ounces
produced from 97,639 tons at 24.07 ounces per ton in 2000 versus 2,792,022
ounces from 113,514 tons at 25.40 ounces per ton in 1999. The decrease in
production was primarily due to fewer productive stopes being available as
mining proceeds to the outskirts of the West Chance area. Silver sales volume
was 237 thousand higher than production for 2000 due to the draw down of WIP
inventory as a result of the shutting down of the antimony plant as discussed
above. By-product revenue decreased because of lower lead prices received and
decreased lead production and sales.
Cost of revenues decreased $2.6 million (16.7%) from $15.3 million in
the first half of 1999 to $12.7 million in the first half of 2000 primarily due
to lower smelter, mining, and metallurgical costs as a result of the lower
production and sales. Total production cost decreased by $2.2 million due to the
reduction in tons and ounces of silver produced during the 2000 period. In
addition, costs associated with the reduction of WIP inventories in the first
half of 1999 were approximately $400 thousand dollars more than the costs
associated with the reduction of WIP inventories in the 2000 period.
Net operating cash production costs increased $0.33 to $4.70 per ounce
of silver. This increase was primarily due to fixed costs being spread over
fewer ounces and a $0.10 per ounce decrease in by-product credits. These costs
were partially offset by reduced per ounce smelter costs due to improved grades
for both silver and lead concentrates produced and reduced tons of silver and
lead concentrate production in 2000, partially offset by the increase in
impurity penalties discussed above.
Exploration expense decreased $233 thousand in 2000 compared to 1999
primarily due to a reduction of expenditures for the Sunshine Mine and other
projects in Argentina and the US. Interest income decreased $88 thousand due to
lower average invested cash balances.
Selling, general and administrative expense declined $323 thousand due
to a variety of cost reductions.
Interest and debt expense decreased $719 thousand primarily due to the
amortization in 1999 of the discount feature associated with the 5% Convertible
Notes issued in January 1999, the amortization of debt discount and issuance
costs for the Eurobonds in the 1999 quarter and lower outstanding balances on
the Company's debt. These were partially offset by the $1.4 million of
additional interest on the 10% Notes.
Other, net for the 2000 period includes fees and expenses related to
attempted financing transactions and asset sales. Other, net of $1,097 thousand
in 1999 primarily represented gains on certain investments sold.
SUNSHINE MINING AND REFINING COMPANY
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On May 11, 2000, certain holders of the 10% Notes converted $308
thousand of the 10% Notes for 456,074 shares of common stock pursuant to the
terms of the 10% Notes. The 10% Notes were issued in November 1997 pursuant to
the Company's reliance on the exemption from registration under the Securities
Act found in Section 4(2), and the shares issued upon conversion of $308
thousand of the 10% Notes were issued pursuant to
10
<PAGE> 11
an exemption for registration under the Securities Act found in Section 3(a)(9)
of the Securities Act or an exemption from registration under the Securities Act
found in Section 4(2).
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
On March 21, 2000, the Company did not make scheduled principal and
interest payments on the Eurobonds. There has not been a default declared on the
Eurobonds, and holders of at least 66 2/3% of the Eurobonds have extended the
maturity date of the principal and interest until August 25, 2000.
The Company did not pay approximately 27% of the interest payment due
April 1, 2000 on the 10% Notes. Also, because the Eurobonds were not retired or
refinanced prior to March 21, 2000, approximately $1.4 million of additional
interest became due pursuant to the terms of the 10% Notes. This additional
interest has not been paid. The Company did not make the quarterly prepayment of
$1.25 million in May 2000. Holders of the 10% Notes have notified the Company
that it is in default on the 10% Notes.
On July 15, 2000, the Company did not make its scheduled interest
payment on the 9% Convertible Subordinated Debentures. The grace period for
non-payment of interest expired on August 14, 2000, and the 9% Notes are in
default.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Special meetings of the holders of the 8% Senior Exchangeable Notes due
2000 (the "Eurobonds") were held on May 24, June 23, June 30, July 14, July 21,
July 28, August 4, August 11, and August 18, 2000. At each of such meetings,
holders of at least 66 2/3% of the principal amount outstanding of the Eurobonds
voted or agreed to extend the maturity date of both the principal and interest
on the Eurobonds to later dates. At the August 18, 2000, meeting, the maturity
date of the principal and interest on the Eurobonds was extended to August 25,
2000.
ITEM 5. OTHER INFORMATION
By letter dated July 7, 2000, the New York Stock Exchange, Inc.
("NYSE") notified the Company that trading in the Company's Common Stock and 9%
Convertible Reset Debentures due July 15, 2008, would be suspended on July 14,
2000, and application would be made by the NYSE to the Securities and Exchange
Commission to "delist" both issues. The notice from the NYSE advised that
decision was reached based upon amount of total stockholders' equity, and the
thirty-day average share price being less than $1 for the Common Stock. The
Company had previously submitted a plan to the NYSE to attempt to bring the
issues into conformity with continued listing standards within a period of time
required by the NYSE. The Company has not appealed the determination. The
Company's Common Stock now trades on the OTC Bulletin Board under the trading
symbol "SSCF."
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27.0 Financial Data Schedule
(b) During the period covered by this Report, no current reports on
Form 8-K were filed during such period or with respect to events occurring after
the period covered by this Report but prior to the filing of this Report.
SIGNATURES
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 hereto duly authorized.
SUNSHINE MINING AND REFINING COMPANY
Dated: August 18, 2000 By: /s/ WILLIAM W. DAVIS
----------------------------------
William W. Davis
Executive Vice President
and Chief Financial Officer
11
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
