<PAGE> 1
As filed with the Securities and Exchange Commission on January 7, 2000
Registration Nos. 333-_____
333-41641
================================================================================
SECURITIES AND EXCHANGE COMMISSION
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
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 600
BOISE, IDAHO 83702
(208) 345-0660
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
JOHN S. SIMKO, CHIEF EXECUTIVE OFFICER
877 W. MAIN STREET, SUITE 600
BOISE, IDAHO 83702 (208) 345-0660
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
COPY TO:
JANICE V. SHARRY
HAYNES AND BOONE, LLP
901 MAIN STREET
SUITE 3100
DALLAS, TEXAS 75202-3789
(214) 651-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
<PAGE> 2
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS TO BE PRICE PER OFFERING REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED SHARE PRICE FEE
- ----------------------------------------- ----------------------- ------------------- -------------------- -------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 2,500,000 $1.40625(3) $3,515,625(3) $928
shares(1),(2)
- ----------------------------------------- ----------------------- ------------------- -------------------- -------------------
</TABLE>
(1) Shares of common stock registered by the registrant under Registration
Statement No. 333-41641 and not previously issued upon conversion of or
as payment of interest on Sunshine Mining and Refining Company's Senior
Convertible Promissory Notes or exercise of Sunshine Mining and
Refining Company's warrants in the amount of 2,035,732 as of January 4,
2000 are consolidated in this registration statement pursuant to Rule
429 under the Securities Act. Registration fees with respect to
Registration Statement No. 333-41641 in the amount of $5,531.25 have
previously been paid. The total amount registered under this
registration statement as so consolidated is 4,535,732.
(2) Represents the additional number of shares of common stock that may be
issued upon conversion of or as payment of interest on Sunshine Mining
and Refining Company's Senior Convertible Promissory Notes. The
additional number of shares of common stock are being registered
pursuant to a requirement of the Senior Convertible Promissory Notes
that Sunshine Mining and Refining Company reset the conversion price of
such notes due to the 1 for 8 reverse stock split that the Company
effected on August 6, 1999. The number of shares of common stock to be
registered shall be deemed to include such greater number of shares of
common stock as are issuable as a result of any adjustment to the
conversion price of the Senior Convertible Promissory Notes that is
attributable to stock splits, stock dividends, or similar transactions.
(3) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high and low reported sales price of the
common stock on the New York Stock Exchange on January 4, 2000.
Pursuant to Rule 429 under the Securities Act, the prospectus filed as part
of this registration statement also relates to the common stock registered by
the registrant under Registration Statement No. 333-41641 that remain unissued
common stock as of January 4, 2000 in the amount of 2,035,732 shares. This
registration statement also constitutes Post-Effective Amendment No. 1 with
respect to the registrant's Registration Statement No. 333-41641.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
ii
<PAGE> 3
================================================================================
PROSPECTUS
----------------
SUNSHINE MINING AND REFINING COMPANY
877 W. Main Street, Suite 600,
Boise, Idaho 83702,
208.345.0660
UP TO 4,535,732 SHARES OF COMMON STOCK
----------------
This Prospectus relates to the resale by selling stockholders of our common
stock issuable upon conversion of or as payment of interest on our senior
convertible promissory notes. The selling stockholders may offer the shares of
common stock through public or private transactions, at prevailing market
prices, or at privately negotiated prices.
New York Stock Exchange Symbol: SSC
Recent Price: $1.4375 at January 4, 2000.
----------------
Prospective Purchasers Should Consider Carefully The Risk Factors Beginning
On Page 3 Of This Prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
----------------
Prospectus dated January 7, 2000
1
<PAGE> 4
================================================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RISK FACTORS................................................. 3
WHERE YOU CAN FIND MORE INFORMATION.......................... 6
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE............ 6
THE COMPANY.................................................. 7
RECENT DEVELOPMENTS.......................................... 7
DESCRIPTION OF THE SENIOR CONVERTIBLE
PROMISSORY NOTES............................................. 8
USE OF PROCEEDS.............................................. 9
DESCRIPTION OF CAPITAL STOCK................................. 9
PLAN OF DISTRIBUTION......................................... 11
SELLING STOCKHOLDERS......................................... 13
SHARES ELIGIBLE FOR FUTURE SALE.............................. 14
LEGAL MATTERS................................................ 14
EXPERTS...................................................... 14
</TABLE>
================================================================================
2
<PAGE> 5
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS OR INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS
BELOW PRIOR TO YOUR PURCHASE OF COMMON STOCK. THIS PROSPECTUS AND THE OTHER
INFORMATION INCORPORATED BY REFERENCE INTO THIS PROSPECTUS CONTAIN
"FORWARD-LOOKING STATEMENTS," WHICH CAN BE IDENTIFIED BY TERMINOLOGY SUCH AS
"MAY," "WILL," "EXPECT," "ANTICIPATE," "ESTIMATE," OR "CONTINUE." THE RISK
FACTORS SET FORTH BELOW IDENTIFY SOME REPRESENTATIVE RISKS AND UNCERTAINTIES,
BUT NOT EVERY RISK AND UNCERTAINTY, THAT COULD CAUSE OUR ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS.
THE DOCUMENTS WE HAVE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS,
INCLUDING THE FINANCIAL STATEMENTS AND THE NOTES TO FINANCIAL STATEMENTS
CONTAINED IN THOSE DOCUMENTS, CONTAIN MORE DETAILED DISCUSSIONS OF THE MATTERS
DISCUSSED BELOW.
WE HAVE EXPERIENCED OPERATING LOSSES FOR THE LAST TEN YEARS AND EXPECT OUR
LOSSES TO CONTINUE.
Our earnings are directly related to the price of silver because
approximately 80% of our revenues come from the sale of silver mined from our
Sunshine Mine in Kellogg, Idaho. Silver prices have been depressed since 1985.
As a result, our mining operations are not profitable. We have experienced net
losses for the past ten years. Our recent net losses are as follows:
o 1994 - $ 4.9 million
o 1995 - $15.5 million
o 1996 - $25.9 million
o 1997 - $19.3 million
o 1998 - $64.8 million
Our net losses for 1998 reflect a $50.4 million charge to write down our
investment in the Sunshine Mine. At December 31, 1998, we had a $17.5 million
stockholders' deficit, working capital of $9.7 million and cash, cash
investments and silver bullion of $6.6 million. For the nine months ended
September 30, 1999, we reported a net loss of $7.0 million. At September 30,
1999, we had a $17.2 million stockholders' deficit, a working capital deficit of
$20.6 million and cash, cash investments and silver bullion of $7.3 million.
Although at current silver prices and production rates, the Sunshine Mine
generates positive net income and cash flows, these cash flows do not generate
enough funds to cover all of our interest expense, general and administrative
costs, and exploration costs. Therefore at current silver prices, we expect our
operating losses and cash flow deficiencies to continue until we complete the
development of or complete the sale of the Pirquitas Mine in Argentina.
FUTURE LOSSES WILL LIKELY RESULT IN LIQUIDITY DEFICIENCIES AND AN INABILITY TO
CONTINUE OPERATIONS.
Our operating losses are primarily a result of depressed silver prices
resulting in margins that are insufficient to cover our other expenses. If
silver prices do not improve, we expect to fund our losses for the 2000 fiscal
year from our cash and cash equivalents and the silver bullion we hold for
investment and, if we sell the Pirquitas Mine, the proceeds from the sale of the
Pirquitas Mine. On September 30, 1999, our cash, cash equivalents, and silver
bullion held for investment totaled approximately $7.3 million.
If our operating losses and cash flow deficiencies continue, we eventually
may be required to further curtail our operations or cease mining at the
Sunshine Mine altogether. During 1999, we reduced our Argentina operations
primarily to the level required to complete the feasibility study for the
Pirquitas Mine and implemented cost reduction and cash conservation plans and
initiatives to reduce our work-in-process inventory. To raise additional cash to
fund debt maturing in March 2000, and to begin work on other properties, we are
examining the potential of a sale of the Pirquitas Mine. We cannot assure you
that such a sale, if it occurs, would generate sufficient cash to accomplish all
these objectives. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business and Properties" and our
financial statements, including the notes to our financial statements, that
appear in our Annual Report and Quarterly Reports.
THE PRICE OF SILVER IS VOLATILE AND AFFECTS OUR STOCK PRICE.
Because our earnings are directly related to the price of silver, the value
of the common stock historically has moved in the same direction as the price of
silver. Numerous factors beyond our control, alone or in combination, may cause
the price of silver to rise or fall.
These factors include, among others:
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<PAGE> 6
o inflation expectations,
o speculative activities of market makers, arbitrageurs, traders and other
participants in the commodities markets,
o levels of silver production, and
o the demand for silver as a component of manufactured goods.
The following table contains the high, low and average closing spot prices
per ounce of silver on the Commodity Exchange, Inc. ("COMEX") for the indicated
periods.
<TABLE>
<CAPTION>
NOMINAL DOLLARS
--------------------------------------------
YEAR HIGH LOW AVERAGE
- -------- ------- ------- -------
<S> <C> <C> <C>
1983 $ 14.74 $ 8.38 $ 11.46
1984 10.17 6.25 8.15
1985 6.89 5.48 6.14
1986 6.32 4.85 5.49
1987 11.25 5.35 6.99
1988 8.06 6.01 6.53
1989 6.20 5.02 5.47
1990 5.35 3.94 4.82
1991 4.55 3.51 4.03
1992 4.32 3.63 3.94
1993 5.44 3.52 4.31
1994 5.78 4.61 5.28
1995 6.10 4.38 5.20
1996 5.84 4.71 5.21
1997 6.34 4.16 4.88
1998 7.26 4.62 5.55
1999 5.76 4.87 5.22
</TABLE>
On January 4, 2000, the closing price of spot silver as reported on the
COMEX was $5.335 per ounce.
WE ARE DEPENDENT ON THE SUCCESS OF OUR EXPLORATION AT THE SUNSHINE MINE AND THE
DEVELOPMENT OR SALE OF THE PIRQUITAS MINE.
Substantially all of our revenues are derived from the Sunshine Mine, which
does not generate sufficient cash at current silver prices to cover our current
cash requirements. Therefore, our future earnings are dependent on the success
of our exploration projects at the Sunshine Mine, success at our other
exploration projects, and the successful development of the Pirquitas Mine or
the sale of the Pirquitas Mine for a sufficient price to retire our debt due in
March 2000. Successful development of a new mine involves a high degree of risk.
There is no guarantee that the Pirquitas Mine can be sold for a sufficient price
to retire all our debt. See "Business and Properties -- Operations --
Exploration Activities at the Sunshine Mine" included in the Annual Report.
BECAUSE OUR RESERVE ESTIMATES ARE IMPRECISE, WE DO NOT KNOW THE EXACT QUANTITY
OF MATERIALS WE WILL RECOVER.
Our ore reserve estimates discussed in the "Company" section below represent
the judgment of our geologic personnel and are not guarantees that the indicated
quantities will be recovered. Reserve estimates are expressions of judgment
based largely on data from diamond drill holes and underground openings, such as
drifts or raises, which expose the mineral on 1, 2, or 3 sides, sampling data
and similar examinations.
4
<PAGE> 7
Our reserve estimates may change as ore bodies are mined and we obtain
additional data. Our reserve estimates at the Pirquitas Mine come from an
independent survey. Our reserve estimates at the Sunshine Mine were prepared
internally; however, the methodology used to prepare the reserve estimates has
been reviewed and provided by an independent consultant.
NO ASSURANCE CAN BE MADE THAT FINANCING CAN BE OBTAINED TO DEVELOP THE PIRQUITAS
MINE.
It is estimated that it will require approximately $140 million to put the
Pirquitas Mine into production. In order to develop the Pirquitas Mine, we will
need to obtain equity financing as well as obtain third party debt financing,
enter into a joint venture, sell a royalty interest or take other similar action
to raise the capital required to develop the Pirquitas Mine. Such sources of
capital providers may not be available on terms acceptable to us. If said
sources are not available, we may not develop the Pirquitas Mine.
NO ASSURANCE CAN BE MADE THAT THE PROCEEDS FROM THE SALE OF THE PIRQUITAS MINE
WILL BE SUFFICIENT TO RETIRE OUR DEBT DUE MARCH 2000.
The proceeds of the sale of the Pirquitas Mine may not be sufficient to
retire our debt due in March 2000. If the proceeds of such sale are not
sufficient to retire that debt, we may not have the liquidity to continue the
development work at the Sunshine Mine and our other projects.
WE MAY NOT BE ABLE TO FULLY INSURE AGAINST RISKS ASSOCIATED WITH OPERATING
MINES, ESPECIALLY ENVIRONMENTAL RISKS.
Our operations may be affected by risks and hazards generally associated
with the mining industry. These risks and hazards include fires, cave-ins, rock
bursts, flooding, industrial accidents, mechanical or electrical failures,
unusual or unexpected rock formations and environmental pollution or other
hazards resulting from the disposal of waste products occurring from production.
Such risks could result in damage to, or destruction of, mineral properties or
producing facilities, personal injury, environmental damage, delays in mining,
monetary losses and possible legal liability. We maintain insurance at levels
consistent with our historical experience and industry practice. We may not
always be able to pay for this insurance, especially if there is an increase in
the cost of premiums. Insurance for environmental risks is generally either not
available or too costly for our industry.
THERE IS EXTENSIVE GOVERNMENT REGULATION OF OUR INDUSTRY, AND SUCH REGULATION
SOMETIMES RESULTS IN LAWSUITS.
Extensive federal, state and local laws and regulations control our mineral
mining and exploration activities. These laws and regulations also govern the
possible effects of these activities on the environment. We have been involved
in lawsuits and are involved in a lawsuit in which we have been accused of
violating environmental laws and may be subject to similar lawsuits in the
future. These lawsuits have resulted in substantial expenses and diversions of
our resources. Any future lawsuits can be expected to result in similar expenses
and unproductive diversion of our resources. In addition, new legislation and
regulations could be adopted at any time that may result in additional operating
expense, capital expenditures or restrictions and delays in the mining,
production or development of our properties. To the extent that we devote money
and employees' time responding to government regulations or lawsuits, these
resources will not be devoted to our income-producing operations.
THE FINANCIAL CONDITION OF OUR ARGENTINA AND MEXICO OPERATIONS IS SUBJECT TO
SOCIAL, POLITICAL AND ECONOMIC RISKS, INCLUDING CHANGES IN FOREIGN INVESTMENT
AND TRADE POLICIES, AND OTHER RISKS ASSOCIATED WITH FOREIGN OPERATIONS.
We presently conduct operations in Argentina and Mexico and anticipate that
we will continue to conduct significant international operations in the future.
Because we conduct operations internationally, we are subject to the effects of
local political and economic developments, exchange controls, currency
fluctuations, royalty and tax increases, retroactive tax claims, expropriation,
import and export regulations, other foreign laws or policies governing
operations of foreign-based companies, United States laws and policies affecting
foreign trade, taxation and investment and civil unrest and union activity
different from the United States. Changes in these items could restrict our
ability to conduct operations, reduce the profitability of our operations or
reduce the value of our assets in Argentina and Mexico.
Because we do business with foreign governments, our contracts with those
governments are subject to renegotiation and our ability to enforce our rights
against those governments by bringing a lawsuit may be subject to the doctrine
of sovereign immunity, which prohibits or restricts lawsuits against government
agencies. In addition, if we are sued in a foreign country or are forced to
bring suit in a foreign country to enforce our rights against foreign parties,
then our ability to control the costs and manage the conduct of any foreign
5
<PAGE> 8
litigation will be difficult because of our unfamiliarity with foreign court
systems and procedures, language barriers and the expense and inconvenience of
international travel and communications.
ISSUANCES AND RESALES OF OUR COMMON STOCK MAY LOWER THE PRICE OF THE COMMON
STOCK.
As of January 4, 2000, we had 38.7 million shares of common stock
outstanding, excluding 579,344 treasury shares. On August 6, 1999, we effected a
1 for 8 reverse stock split of our common stock in order to increase our stock
price to over $1 to comply with the continued listing requirements of the New
York Stock Exchange. All references in this Prospectus to the number of shares
of common stock prior to August 6, 1999 have been adjusted to reflect the 1 for
8 reverse stock split. We previously have registered with the Securities and
Exchange Commission and have unissued as of January 4, 2000 a total of
approximately 6.8 million shares of common stock for resale by some of our
stockholders. In addition, we have reserved a large number of shares of common
stock for future issuance upon the exercise of outstanding convertible
securities, stock warrants and options. We caution you that:
o the sale of shares of common stock previously registered or to be
registered for resale could have a material adverse effect on the market
price of the common stock,
o the issuance of shares of common stock that have been reserved for future
issuance could also have a material adverse effect on the market price of
the common stock, and
o the issuance of shares of common stock could significantly dilute our
current stockholders' ownership interests.
WE MAY NOT BE ABLE TO MEET THE NEW YORK STOCK EXCHANGE'S CONTINUED LISTING
REQUIREMENTS.
On August 6, 1999, we effected a 1 for 8 reverse stock split to increase our
stock price to over $1 to comply with the New York Stock Exchange's continued
listing requirements. The New York Stock Exchange continued listing requirements
also include a requirement that a listed company have a market capitalization of
at least $50 million. As of January 4, 2000, our market capitalization was $55.6
million. If the Company's market capitalization falls beneath $50 million, the
New York Stock Exchange could notify us that we may be delisted. If the New York
Stock Exchange were to issue such a notice, we could require a hearing to be
held with a committee of the board of directors of the New York Stock Exchange.
If the common stock is delisted from trading on the New York Stock Exchange,
there would be a significant reduction in the liquidity of our common stock,
which likely would have a material adverse effect on us and our stockholders.
The adverse impact of a delisting may be mitigated if we are able to have our
common stock listed on another exchange. There can be no assurance, however,
that we will meet the original or continued listing obligations of another
exchange.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the Securities and Exchange Commission's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the Securities and Exchange Commission at 1-800-SEC-0330 for further information
on its public reference room. Our Securities and Exchange Commission filings are
also available to the public from our web site at http://www.sunshinemining.com,
or at the Securities and Exchange Commission's web site at http://www.sec.gov or
at the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. You should
consider the information incorporated by reference to be part of this
prospectus, and information that we file later with the Securities and Exchange
Commission will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings we
make with the Securities and Exchange Commission under Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until the selling security
holders sell all the shares of common stock.
o Annual Report on Form 10-K for the fiscal year ended December 31, 1998,
o Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1999, June 30, 1999 and September 30, 1999,
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o Reports on Form 8-K filed on February 4, 1999, June 4, 1999, June 14,
1999 and August 11, 1999,
o Proxy Statement for Annual Meeting of Stockholders held on May 24, 1999,
and
o Description of our common stock contained in our Registration Statement
on Form 8-A, as amended, Registration Number 1-7966.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Sunshine Mining and Refining Company
877 W. Main Street Suite 600
Boise, Idaho 83702
208.345.0660
You should rely only on the information incorporated by reference or
provided in this prospectus or the supplements to the prospectus. We have not
authorized anyone to provide you with different information. The selling
stockholders are not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any supplement to this prospectus is accurate as of any date other
than the date on the front of the document.
THE COMPANY
We are one of the world's leading primary silver producers. We own the
Sunshine Mine in the Coeur d'Alene Mining District of northern Idaho and the
Pirquitas Mine in Northwest Argentina.
The Sunshine Mine, in operation for over 100 years, has produced more silver
than any other primary silver producing mine in North America. Currently,
estimated reserves for the Sunshine Mine are proven and probable reserves of
37.4 million ounces of silver of which our share of the reserves is 36.6 million
ounces of silver. Production in 1999 is expected to be approximately 5.3 million
ounces, and projected net cash production costs are projected to be less than
$4.50 per ounce of silver.
The bankable feasibility study which was completed in April 1999 for the
Pirquitas Mine is being revised to take into account enhancements which have
been identified. As a result of these enhancements, the estimated net present
value of the project at a 5% discount rate (unleveraged, after tax) increased to
$138 million from $109 million as determined in the April 1999 bankable
feasibility study. The amount of recoverable silver into high-grade concentrates
has been increased from 92 million ounces to approximately 105 million ounces
due to the enhancements. The bankable feasibility study was originally prepared
to support our efforts to finance development of the Pirquitas Mine and is being
revised to support our efforts to finance the development of or to sell the
Pirquitas Mine.
Our company is a Delaware corporation. The mailing address and telephone
number for our principal executive offices are:
877 W. Main Street
Suite 600
Boise, Idaho 83702
208.345.0660
RECENT DEVELOPMENTS
On August 6, 1999, we effected a 1 for 8 reverse stock split of our common stock
in order to increase our stock price to over $1 to comply with the continued
listing requirements of the New York Stock Exchange. All historic per share
numbers reflected in this prospectus have been adjusted to reflect the reverse
stock split.
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<PAGE> 10
EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share adjusted to reflect the reverse stock split. All amounts are in U.S.
dollars in thousands, except per share amounts.
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED
YEAR JUNE 30, JUNE 30, MARCH-31,
---------------------------------- ---------------------- ---------------------- ----------------------
1998 1997 1996 1999 1998 1999 1998 1999 1998
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Numerator:
Net Loss.............. $ (64,845) $ (19,308) $ (25,902) $ (5,206) $ (6,540) $ (2,341) $ (6,612) $ (2,866) $ 71
Gain on retirement
and exchange of
preferred
stock/debt......... -- -- 40,124 216 -- 216 -- -- --
Preferred stock
dividends.......... -- -- (2,622) -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Numerator for
basic earnings
per share -
income (loss)
available to
common
shareholders....... $ (64,845) $ (19,308) $ 11,600 $ (4,900) $ (6,540) $ (2,125) $ (6,612) $ (2,866) $ 71
Denominator:
Denominator for
basic and
diluted earnings
per share -
weighted -
average shares..... 32,109 31,892 27,823 33,525 32,029 34,524 32,095 32,514 31,961
Basic and diluted
earnings (loss) per
share................. $ (2.02) $ (0.61) $ 0.42 $ (0.15) $ (0.20) $ (0.06) $ (0.21) $ (0.09) $ 0.00
</TABLE>
DESCRIPTION OF THE SENIOR CONVERTIBLE PROMISSORY NOTES
On November 24, 1997, we completed a private placement of the senior
convertible promissory notes convertible into our common stock.
The senior convertible promissory notes rank senior to all our subordinated
obligations and are convertible into shares of our common stock. The initial
conversion price of the Notes was $7.60, subject to reset and adjustment as set
forth in the terms of the senior convertible promissory note. In addition, the
Company generally may, at its option, make interest payments, mandatory
prepayments and certain other payments in respect of the senior convertible
promissory notes in shares of common stock. Interest on the senior convertible
promissory notes accrues at an initial rate of 10% per annum (subject to
adjustment) and is payable semi-annually. The senior convertible promissory
notes are guaranteed by Sunshine Argentina, Inc. and Sunshine Exploration, Inc.,
two of our subsidiaries, and may be guaranteed by Sunshine Precious Metals,
Inc., which is also one of our subsidiaries, upon the retirement or refinancing
of Sunshine Precious Metals, Inc.'s 8% Senior Exchangeable Notes due 2000. The
senior convertible promissory notes amortize in twelve equal quarterly
installments commencing February 24, 2000 and mature on November 24, 2002.
As a result of the reverse stock split of our common stock, the conversion
price of the senior convertible promissory note was reduced to $1.80 in November
1999.
The senior convertible promissory notes are subject to limitations on
transfer which prohibit any transfer of the senior convertible promissory notes
which would result in there being more than 10 holders of the senior convertible
promissory notes. In addition, the senior convertible promissory notes limit the
number of shares of our common stock which may be issued in respect of the
senior convertible promissory notes. Such shares (which constitute the shares of
our common stock offered hereby) may not exceed the maximum number of shares of
our common stock that can be issued without obtaining stockholder approval under
the rules of the New York Stock Exchange. In the event an issuance of shares of
our common stock under the terms of the senior convertible promissory notes
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would exceed the maximum number of shares of our common stock that can be issued
without obtaining stockholder approval under the rules of the New York Stock
Exchange, we are required to make a cash payment in lieu thereof. Finally, the
senior convertible promissory notes state that a holder and its affiliates may
not convert senior convertible promissory notes if, after such conversion, the
holder and its affiliates would in the aggregate be the beneficial owner of more
than 4.75% of the total number of outstanding shares of common stock. The holder
has the ability to waive this limitation upon 61 days notice.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by the
selling stockholders.
DESCRIPTION OF CAPITAL STOCK
We have summarized some of the material terms and provisions of our
outstanding capital stock in this section. The summary is not complete. We have
also filed our Certificate of Incorporation, the Amendments to our Certificate
of Incorporation and our Bylaws with the Securities and Exchange Commission. You
should read our Certificate of Incorporation, as amended, and our Bylaws for
additional information before you purchase any of the common stock.
As of January 4, 2000, our authorized capital stock was 95 million shares.
Those shares consist of 75 million shares of common stock, par value $0.01 per
share, and 20 million shares of preferred stock, par value $1.00 per share.
COMMON STOCK
As of January 4, 2000, 38.7 million shares of our common stock were
outstanding and 579,344 shares of common stock were held in our treasury. As of
January 4, 2000, there were approximately 30,000 holders of record of our common
stock.
Subject to the senior rights of preferred stock which may from time to time
be outstanding, holders of common stock are entitled to receive dividends
declared by the Board of Directors out of funds legally available for the
payment of dividends. Upon the dissolution and liquidation of our business,
holders of common stock are entitled to a ratable share of our net assets
remaining after payment to the holders of the preferred stock of the full
preferential amounts to which they are entitled. All outstanding shares of
common stock are fully paid and non-assessable.
The holders of common stock are entitled to one vote per share for the
election of directors and in all other matters submitted to a vote of
stockholders. Holders of common stock are not entitled to cumulate their votes
for the election of directors. Holders of common stock are not entitled to
preemptive rights.
In order to approve any business combination, including any merger or
consolidation or the sale, lease, exchange or other disposition of all or
substantially all of our assets, including a disposition in connection with a
dissolution or winding up or liquidation, Article Five of our Certificate of
Incorporation requires the affirmative vote or consent of the holders of:
o a majority of the shares entitled to vote on the business combination,
and
o a majority of any series or class of preferred stock entitled to vote as
a class on the business combination.
Article Five may not be amended or repealed without the prior affirmative vote
or consent of the holders of:
o 66 2/3% of all shares of stock entitled to vote on the amendment or
repeal, and
o 66 2/3% of any series or class of preferred stock, if the Board of
Directors gives such series or class of preferred stock such right to
vote as a class.
These provisions may have the effect of delaying, deterring or preventing a
change of control of our corporation.
We currently do not pay cash dividends on the common stock. We have not paid
cash dividends on the common stock since the third quarter of 1981. Our Board of
Directors, at its discretion, may declare dividends. The Board of Directors will
consider, among other
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<PAGE> 12
factors, our current and projected earnings and liquidity position. We do not
expect to begin making dividend payments in the foreseeable future.
Our payment of cash dividends is subject to restrictions. Some of our debt
securities impose restrictions on our ability to declare or pay cash dividends
and make distributions on our capital stock. Because of these restrictions, no
funds are available for us to make cash dividends.
The common stock is listed on the New York Stock Exchange. Our transfer
agent and registrar for the common stock is American Stock Transfer & Trust
Company.
PREFERRED STOCK
Subject to any limitations under Delaware law, our Board of Directors,
without any further vote or action by the stockholders, may:
o authorize the issuance of preferred stock in one or more series,
o establish from time to time the number of shares to be included in each
such series,
o fix the rights, preferences and privileges of the shares of each wholly
unissued series of preferred stock and any qualifications, limitations or
restrictions therein, and
o increase or decrease the number of shares of any such series, but not
below the number of shares of such series then outstanding.
The Board of Directors may authorize the issuance of preferred stock with
voting or conversion rights that could adversely affect the voting power or
other rights of the holders of common stock. Our issuance of preferred stock, if
any, therefore, may have the effect of delaying, deferring or preventing a
change of control of our corporation.
As of January 4, 2000, no shares of preferred stock were outstanding. We
have no current plan to issue any shares of preferred stock. Our preferred stock
is not entitled to preemptive rights.
MEETINGS OF THE STOCKHOLDERS
Our Bylaws provide for annual meetings and special meetings of our
stockholders.
Calling and Notice of Meetings. The Board of Directors designates the date
and time of our annual stockholders meetings. The Chairman of the Board of
Directors, the President, the Board of Directors or the majority of the
directors by written order, can call a special stockholders meetings. When a
stockholders meeting is called, we must provide written notice of the
stockholders meeting to the stockholders. We must provide notice of any
stockholders meeting to each stockholder entitled to vote not less than ten nor
more than sixty days before the stockholders meeting. A notice of a special
stockholders meeting must describe the purpose or purposes of the stockholders
meeting. The Board of Directors may fix, in advance, a record date on which we
determine the stockholders that are entitled to notice of a stockholders meeting
or to vote at any stockholders meeting. The record date may not be more than
sixty nor less than ten days before the date of the stockholders meeting. We
must also prepare and make a complete list of the stockholders entitled to vote
at a stockholders meeting. We must prepare this list at least ten days before
the stockholders meeting. Any stockholder may examine this list for a period of
ten days prior to the stockholders meeting.
Quorum and Voting. Stockholders may represent themselves or designate a
proxy to represent their shares at any stockholders meeting. The representation
of a majority of the shares of capital stock entitled to vote at a stockholders
meeting constitutes a quorum for the conduct of business at the stockholders
meeting. Our Certificate of Incorporation, our By-Laws, or applicable law may
contain special provisions requiring a specific percentage of votes of our
capital stock to decide a specific question brought before a stockholders
meeting at which a quorum is present. If no special provisions exist, then the
vote of the holders of a majority of the shares of capital stock entitled to
vote decides any question brought before the stockholders meeting.
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<PAGE> 13
LIMITATION OF LIABILITY AND INDEMNIFICATION
Limitation of Liability. Our Certificate of Incorporation limits the
personal liability of our directors to our corporation. It provides that no
director shall be personally liable to our corporation or its stockholders for a
breach of a fiduciary duty as a director, unless the limitation is not permitted
by the Delaware General Corporation Law. This includes liability for:
o any breach of the director's duty of loyalty to our corporation or its
stockholders,
o any act or omission not in good faith,
o any act or omission that involves gross negligence,
o any act or omission that involves intentional misconduct or a knowing
violation of law,
o any transaction from which the director derived any improper personal
benefit, or
o any act or omission where the liability of the director is expressly
provided by the Delaware General Corporation Law.
As a result of these limitations, we and our stockholders may be unable to
obtain monetary damages from a director for breach of the duty of care. We and
our stockholders may still seek injunctive or other equitable relief for a
director's alleged breach of such director's fiduciary duty. If these equitable
remedies are unavailable, however, we and our stockholders may not have an
effective remedy against the challenged conduct.
Indemnification. Our Certificate of Incorporation and Bylaws provide rights
of indemnification for all of our officers and directors.
THE DELAWARE BUSINESS COMBINATION ACT
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Section 203 prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in
the manner described by Section 203. A "business combination" includes mergers,
asset sales and other transactions that financially benefit the interested
stockholder. Subject to exceptions, an "interested stockholder" is a person who,
together with affiliates and associates, owns, or within three years did own,
15% or more of the company's voting stock. The stockholders holding a majority
of the shares of the company's voting stock may amend the company's Certificate
of Incorporation or Bylaws to effectively avoid the provisions of this statute.
We do not intend to "elect out" of this statute by amending our Certificate of
Incorporation or Bylaws.
PLAN OF DISTRIBUTION
We will not receive any of the proceeds of the sale of the common stock
offered hereby. The common stock may be sold from time to time to purchasers
directly by the selling stockholders. Alternatively, the selling stockholders
may from time to time offer the common stock through brokers, dealers or agents
who may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of the common
stock for whom they may act as agent. The selling stockholders and any such
brokers, dealers or agents who participate in the distribution of the common
stock may be deemed to be "underwriters", and any profits on the sale of the
common stock by them and any discounts, commissions or concessions received by
any such brokers, dealers or agents might be deemed to be underwriting discounts
and commissions under the Securities Act of 1933. To the extent the selling
stockholders may be deemed to be underwriters, the selling stockholders may be
subject to statutory liabilities of the Securities Act, including, but not
limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under
the Securities Exchange Act of 1934.
The common stock offered hereby may be sold from time to time by the selling
stockholders, or, to the extent permitted, by their pledgees, donees,
transferees or other successors in interest. The common stock may be disposed of
from time to time in one or more transactions through any one or more of the
following:
o the purchasers directly,
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<PAGE> 14
o in ordinary brokerage transactions and transactions in which the broker
solicits purchasers,
o through underwriters or dealers who may receive compensation in the form
of underwriting discounts, concessions, or commissions from the selling
stockholders or such successors in interest and/or from the purchasers of
the common stock for whom they may act as agent,
o the writing of options on the common stock,
o the pledge of the common stock as security for any loan or obligation,
including pledges to brokers or dealers who may, from time to time,
themselves effect distributions of the common stock or interests therein,
o purchases by a broker or dealer as principal and resale by such broker or
dealer for its own account,
o a block trade in which the broker or dealer so engaged will attempt to
sell the securities as agent but may position and resell a portion of the
block as principal to facilitate the transaction,
o an exchange distribution in accordance with the rules of such exchange or
transactions in the over the counter market,
o privately negotiated transactions,
o short sales, or
o a combination of any of the above transactions.
Such sales may be made at prices and at terms then prevailing or at prices
related to the then current market price or at negotiated prices and terms. In
effecting sales, brokers or dealers may arrange for other brokers or dealers to
participate. From time to time, the selling stockholders may engage in short
sales, short sales against the box, puts and calls and other transactions in the
common stock or other securities issued by us or derivatives of securities
issued by us, and may sell and deliver the common stock in connection with their
transactions or in settlement of securities loans.
The selling stockholders or such successors in interest, and any
underwriters, brokers, dealers or agents that participate in the distribution of
the common stock, may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, and any profit on the sale of the common stock by them
and any discounts, commissions or concessions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933.
At any time a particular offer of the common stock is made, a revised
prospectus or prospectus supplement, if required, will be distributed which will
set forth the aggregate amount and type of securities being offered and the
terms of the offering, including the name or names of any underwriters, dealers
or agents, any discounts, commissions and other items constituting compensation
from the selling stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. Such prospectus supplement and, if
necessary, a post-effective amendment to the registration statement of which
this prospectus is a part, will be filed with the Securities and Exchange
Commission to reflect the disclosure of additional information with respect to
the distribution of the common stock. In addition, the common stock covered by
this prospectus may be sold in private transactions or under Rule 144 rather
than pursuant to this prospectus.
To the best of our knowledge, there are currently no plans, arrangements or
understandings between any selling stockholders and any broker, dealer, agent or
underwriter regarding the sale of the common stock by the selling stockholders.
There is no assurance that any selling stockholder will sell any or all of the
common stock offered by it hereunder or that any such selling stockholder will
not transfer, devise or gift such common stock by other means not described
herein.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934 and the rules and regulations thereunder, which may include, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the common stock by the selling stockholders and any other such person.
Furthermore, under Regulation M under the Securities Exchange Act of 1934, any
person engaged in the distribution of the common stock may not simultaneously
engage in market-making activities with respect to the particular common stock
being distributed for
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<PAGE> 15
certain periods prior to the commencement of such distribution. All of the
foregoing may affect the marketability of the common stock and the ability of
any person or entity to engage in market-making activities with respect to the
common stock.
Pursuant to the Registration Rights Agreement entered into in connection
with the offer and sale of the senior convertible promissory notes, each of us
and the selling stockholders will be indemnified by the other against
liabilities, including liabilities under the Securities Act of 1933, or will be
entitled to contribution in connection therewith.
We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale of the common stock to the public other than
commissions, fees and discounts of underwriters, brokers, dealers and agents.
SELLING STOCKHOLDERS
The selling stockholders consist of Stonehill Institutional Partners, L.P.
and Stonehill Offshore Partners Limited, which may be deemed under common
control. Each fund disclaims beneficial ownership of the securities held by the
other fund. The selling stockholders currently hold our senior convertible
promissory notes that are convertible into common stock. The shares of common
stock that may be sold by the selling stockholders under this prospectus are
issuable upon conversion of our senior convertible promissory notes. Permitted
transferees, pledges, donees and successors of Stonehill Institutional Partners,
L.P. and Stonehill Offshore Partners Limited that may in the future hold senior
convertible promissory notes or common stock issued upon conversion of senior
convertible promissory notes may also be selling stockholders that use this
prospectus.
As of January 4, 2000, Stonehill Institutional Partners, L.P. owned 13,054
shares of our common stock and an estimated amount of 3,189,331 shares of common
stock issuable upon conversion of the senior convertible promissory notes,
subject to the limitations set forth in footnote 1. As of January 4, 2000,
Stonehill Offshore Partners Limited owned 13,967 shares of our common stock and
an estimated amount of 5,072,222 shares of common stock issuable upon conversion
of the senior convertible promissory notes, subject to the limitations set forth
in footnote 1.
We cannot assure you that the selling stockholders will sell any or all of
the common stock offered by this prospectus. Because the selling stockholders
may sell using this prospectus none, some or all of the common stock issuable
upon conversion of or as payment of interest on the senior convertible
promissory notes they presently hold, no estimate can be given as to the amount
of the common stock that will be held by the selling stockholders upon
termination of any such sales. In addition, the selling stockholders identified
above may have sold, transferred or otherwise disposed of all or a portion of
their senior convertible promissory notes or common stock since the date on
which they provided us the information regarding their ownership of senior
convertible promissory notes and common stock in transactions exempt from the
registration requirements of the Securities Act of 1993. See "Plan of
Distribution."
Only selling stockholders identified above who beneficially own the common
stock identified with each such selling stockholder's name on the effective date
of the registration statement of which this prospectus forms a part may sell
common stock pursuant to this prospectus. We may from time to time include
additional selling stockholders in supplements to this prospectus.
Other than as a result of the ownership of the senior convertible promissory
notes and the warrants exercisable into our common stock that were exercised in
December 1998, to the best of our knowledge, none of the selling stockholders
had any material relationship with us within the three year period ending on the
date of this prospectus.
- -------------------------
(1) The senior convertible promissory notes state that the aggregate number
of shares of our common stock issuable pursuant to the senior convertible
promissory notes and the warrants, which have previously been exercised,
shall not exceed the maximum number of shares of our common stock that
can be issued without obtaining stockholder approval under the rules of
the New York Stock Exchange. We cannot make any principal or interest
payment in shares of our common stock on the senior convertible
promissory notes if such issuance would require stockholder approval of
the New York Stock Exchange. In the event that the shares of our common
stock to be issued upon conversion of a senior convertible promissory
note would require stockholder approval under the rules of the New York
Stock Exchange, we shall pay the holder of the senior convertible
promissory note an amount equal to the difference between the price at
which a senior convertible promissory note may be converted into shares
of our common stock and the closing bid price on the date of conversion.
In addition, the senior convertible promissory notes state that a holder
and its affiliates may not convert senior convertible promissory notes
if, after such conversion, the holder and its affiliates would in the
aggregate be the beneficial owner of more than 4.75% of the total number
of outstanding shares of common stock. The holder has
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<PAGE> 16
the ability to waive this limitation upon 61 days notice. If the limitation
of the percentage of outstanding common stock that may be issued to a
selling stockholder is waived, the number of shares of common stock owned
prior to the offering by Stonehill Partners, L.P., Stonehill Institutional
Partners, L.P. and Stonehill Offshore Partners Limited collectively would be
8.3 million based on the current conversion price as of January 4, 2000 of
the senior convertible promissory notes. In addition to the limitation on
the ownership of total outstanding shares of common stock that a holder of
the senior convertible promissory notes may beneficially own, the maximum
amount of shares of common stock that may be issued upon conversion of or as
payment of interest on the senior convertible promissory notes and sold
under this prospectus is 4,535,732 shares. However, this maximum number is
subject to certain anti-dilution adjustments. See "Description of the Senior
Convertible Promissory Notes." The actual number of shares issuable upon
conversion of the senior convertible promissory notes will vary depending
on, among other things,
o the price of the common stock on the dates of price resets, if any,
o the application of the limitations in the senior convertible promissory
notes upon the number of shares that may be issued to a selling
stockholder,
o any sales of senior convertible promissory notes by each selling
stockholder, and
o each selling stockholder's decision whether and to what extent to convert
any of its senior convertible promissory notes.
SHARES ELIGIBLE FOR FUTURE SALE
Except for our "affiliates", holders of the shares of common stock offered
and sold in this offering will be able to freely trade these shares without
restrictions or further registration under the Securities Act of 1933. As
defined in Rule 144, an "affiliate" of an issuer is a person that directly, or
indirectly through the use of one or more intermediaries, controls, or is
controlled by, or is under the common control with, such issuer. An "affiliate"
of ours that owns our common stock may only resell the common stock if the
shares are registered under the Securities Act of 1933, unless an exemption from
registration is available, including the exemption contained in Rule 144.
In general, under Rule 144 as currently in effect, a person, or persons
whose shares are aggregated who has beneficially owned his or her shares for at
least one year, including an "affiliate," is entitled to sell his or her shares
subject to volume limitations. A person may sell his or her shares if the number
of shares sold does not exceed the greater of 1% of the then outstanding shares
or the average weekly trading volume of the then outstanding shares during the
four calendar weeks preceding each such sale. A person, or persons whose sales
are aggregated who is not deemed our "affiliate", and who has beneficially owned
shares for at least two years, may sell such shares under Rule 144 without
regard to these volume limitations.
LEGAL MATTERS
Our outside attorneys from the Dallas office of Haynes and Boone, LLP, have
issued an opinion for us about the legality of the offered shares of common
stock offered in this prospectus.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
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================================================================================
UP TO 4,535,732 SHARES OF
COMMON STOCK
SUNSHINE MINING AND
REFINING COMPANY
---------------
PROSPECTUS
---------------
January 7, 2000
================================================================================
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee... $ 928
NYSE Listing Fee...................................... 3,500
Printing and Photocopying Expenses.................... 2,500
Accounting Fees and Expenses.......................... 5,000
Legal Fees and Expenses............................... 20,000
Miscellaneous Expenses................................ 1,000
---------
Total.............................................. $ 32,928
=========
</TABLE>
All of the above expenses except the Securities and Exchange Commission
registration fee and the NYSE listing fee are estimated. All of such expenses
will be borne by the Registrant.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The information set forth pursuant to Item 20 of the Registrant's
Registration Statement on Form S-4 (Registration No. 33-98876) is incorporated
herein by reference.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. Exhibit
----------- -------
<S> <C>
* 4.1 Certificate of Incorporation, filed as Exhibit 3.1 to the
Registrant's Registration Statement on Form S-4 (Registration
No. 33-98876), which exhibit is incorporated herein by
reference.
* 4.2 Amendment to Certificate of Incorporation, filed as Exhibit
4.1 to the Registrant's Current Report on Form 8-K dated May
22, 1996 (File No. 001-100121), which exhibit is incorporated
herein by reference.
* 4.3 Amendment to Certificate of Incorporation, filed as Exhibit
4.3 to the Registrant's Registration Statement on Form S-3
(Registration No. 333-86327), which exhibit is incorporated
herein by reference.
* 4.4 Bylaws, filed as Exhibit 3.3 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1998,
which exhibit is incorporated herein by reference.
* 4.5 Specimen Common Stock Certificate, filed as Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1 (Registration
No. 33-63446), which exhibit is incorporated herein by
reference.
* 4.6 Warrant Agreement, dated as of February 1, 1996, between
Sunshine Merger Company and American Stock Transfer & Trust
Company, as Warrant Agent, filed as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-4 (Registration
No. 33-98876), which exhibit is incorporated herein by
reference.
* 4.7 Warrant Agreement, dated as of February 3, 1994, between the
Registrant and American Stock Transfer & Trust Company, as
Warrant Agent, filed as Exhibit 4.3 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-73608), which exhibit is incorporated herein by reference.
* 4.8 Form of Supplemental Warrant Agreement, dated as of February
1, 1996, between
</TABLE>
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<TABLE>
<S> <C>
Sunshine Merger Company and American Stock Transfer & Trust
Company, as Warrant Agent, filed as Exhibit 4.10 to the
Registrant's Registration Statement on Form S-4 (Registration
No. 33-98876), which exhibit is incorporated herein by
reference.
* 4.9 Warrant Certificate, filed as Exhibit 4.3 to the Registrant's
Registration Statement on Form S-4 (Registration No.
33-98876), which exhibit is incorporated herein by reference.
* 4.10 Form of Warrant Certificate, filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-1 (Registration
No. 33-73608), which exhibit is incorporated herein by
reference.
* 4.11 Form of Indenture, dated as of July 15, 1988, between the
Registrant and MTrust Corp., National Association, with
respect to the Registrant's Convertible Subordinated
Debentures due July 15, 2008, filed as Exhibit 4.25 to the
Registrant's Registration Statement on Form S-3 (Registration
No. 33-21159), which exhibit is incorporated herein by
reference.
* 4.12 First Supplemental Indenture, dated as of August 8, 1988,
Second Supplemental Indenture, dated as of November 10, 1988,
and Third Supplemental Indenture, dated as of April 10, 1991,
by and between the Registrant and Ameritrust Texas, National
Association, the successor to MTrust Corp., National
Association, relating to the issuance of the Registrant's
Convertible Subordinated Debentures due July 15, 2008, filed
as Exhibit 4.3 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1990, which exhibit is
incorporated herein by reference.
* 4.13 Form of Fourth Supplemental Indenture, by and between the
Registrant and Texas Commerce Bank, National Association, as
successor to Ameritrust Texas, National Association, formerly
known as MTrust Corp., National Association, filed as Exhibit
4.10 to the Registrant's Registration Statement on Form S-4
(Registration No. 33-98876), which exhibit is incorporated
herein by reference.
* 4.14 Trust Deed, dated March 21, 1996, between the Registrant,
Sunshine Precious Metals, Inc. and Marine Midland Bank and
Form of Note, filed as Exhibits 4.5 and 4.6 to the
Registrant's Registration Statement on Form S-3 (Registration
No. 333-06537), which exhibits are incorporated herein by
reference.
* 4.15 Warrant Agreement, dated as of June 21, 1996, between the
Registrant, Rauscher, Pierce & Clark and HSBC Investment
Banking Limited and Form of Warrant Certificate, filed as
Exhibits 4.7 and 4.8 to the Registrant's Registration
Statement on Form S-3 (Registration No. 333-06537), which
exhibits are incorporated herein by reference.
* 4.16 Specimen form of Warrant to Purchase Common Stock issued on
November 24, 1997, filed as Exhibit 10.12 to the Registrant's
Registration Statement on Form S-3 (Registration No.
333-41641), which exhibit is incorporated herein by reference.
* 4.17 Specimen form of Senior Convertible Promissory Note, filed as
Exhibit 10.13 to the Registrant's Registration Statement on
Form S-3 (Registration No. 333-41641), which exhibit is
incorporated herein by reference.
* 4.18 Amendment, dated December 11, 1998, to Warrants to Purchase
Common Stock issued on November 24, 1997, filed as Exhibit
4.16 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, which exhibit is
incorporated herein by reference.
</TABLE>
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<TABLE>
<S> <C>
* 4.19 Specimen form of 5% Convertible Promissory Note due January
28, 2001 filed as Exhibit 4.2 to the Registrant's Current
Report on Form 8-K dated January 28, 1999, which exhibit is
incorporated herein by reference.
* 4.20 Letter Agreement dated September 22, 1999 by and between
Sunshine Mining and Refining Company, on the one hand, and
Westgate International, L.P. and Elliott Associates, L.P., on
the other hand, filed as Exhibit 4.20 to the Registrant's
Registration Statement on Form S-3 (Registration No.
333-88293), which exhibit is incorporated herein by reference.
** 5.1 Opinion of Haynes and Boone, LLP.
** 23.1 Consent of Haynes and Boone, LLP (included in the opinion
filed as Exhibit 5.1).
** 23.2 Consent of Ernst & Young LLP.
** 24.1 Power of Attorney (set forth on signature page hereof).
</TABLE>
- ----------
* Previously filed.
** Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement (notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar of securities would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if in the aggregate, the
changes in volume and price represents no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement); and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 21
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of Prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in Boise, Idaho, as of the 7th day of January, 2000.
SUNSHINE MINING AND REFINING COMPANY
By: /s/ JOHN S. SIMKO
------------------------------------
John S. Simko
Chief Executive Officer and
Chairman of the Board
II-5
<PAGE> 23
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of Sunshine Mining and Refining Company (the "Company") hereby
constitutes and appoints John S. Simko and William W. Davis, or either of them
(with full power to each of them to act alone), his true and lawful
attorneys-in-fact and agents, with full power of substitution, for him and on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file any of the documents referred to below relating to the proposed
issuance and registration of shares of Common Stock and the Registration
Statement on Form S-3 under the Securities Act of 1933, as amended, pertaining
thereto, including any amendments increasing the amount of securities for which
registration is being sought, with all exhibits and any and all documents
required to be filed with respect thereto with any regulatory authority,
granting unto said attorneys, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as he himself might or could do if personally present, thereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities indicated as of the 7th day of January, 2000:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JOHN S. SIMKO Director, Chief Executive Officer and
- ------------------------------------------- Chairman of the Board
John S. Simko
/s/ G. CHRIS ANDERSEN Director
- -------------------------------------------
G. Chris Andersen
/s/ DANIEL D. JACKSON Director
- -------------------------------------------
Daniel D. Jackson
/s/ V. DALE BABBITT Director
- -------------------------------------------
V. Dale Babbitt
/s/ WILLIAM W. DAVIS Executive Vice President,
- ------------------------------------------- Chief Financial and
William W. Davis Accounting Officer
/s/ ROBERT B. SMITH, JR. Director
- -------------------------------------------
Robert B. Smith, Jr.
/s/ OREN G. SHAFFER Director
- -------------------------------------------
Oren G. Shaffer
/s/ GEORGE M. ELVIN Director
- -------------------------------------------
George M. Elvin
</TABLE>
II-6
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
* 4.1 Certificate of Incorporation, filed as Exhibit 3.1 to the
Registrant's Registration Statement on Form S-4 (Registration
No. 33-98876), which exhibit is incorporated herein by
reference.
* 4.2 Amendment to Certificate of Incorporation, filed as Exhibit
4.1 to the Registrant's Current Report on Form 8-K dated May
22, 1996 (File No. 001-100121), which exhibit is incorporated
herein by reference.
* 4.3 Amendment to Certificate of Incorporation, filed as Exhibit
4.3 to the Registrant's Registration Statement on Form S-3
(Registration No. 333-86327), which exhibit is incorporated
herein by reference.
* 4.4 Bylaws, filed as Exhibit 3.3 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1998,
which exhibit is incorporated herein by reference.
* 4.5 Specimen Common Stock Certificate, filed as Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1 (Registration
No. 33-63446), which exhibit is incorporated herein by
reference.
* 4.6 Warrant Agreement, dated as of February 1, 1996, between
Sunshine Merger Company and American Stock Transfer & Trust
Company, as Warrant Agent, filed as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-4 (Registration
No. 33-98876), which exhibit is incorporated herein by
reference.
* 4.7 Warrant Agreement, dated as of February 3, 1994, between the
Registrant and American Stock Transfer & Trust Company, as
Warrant Agent, filed as Exhibit 4.3 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-73608), which exhibit is incorporated herein by reference.
* 4.8 Form of Supplemental Warrant Agreement, dated as of February
1, 1996, between Sunshine Merger Company and American Stock
Transfer & Trust Company, as Warrant Agent, filed as Exhibit
4.10 to the Registrant's Registration Statement on Form S-4
(Registration No. 33-98876), which exhibit is incorporated
herein by reference.
* 4.9 Warrant Certificate, filed as Exhibit 4.3 to the Registrant's
Registration Statement on Form S-4 (Registration No.
33-98876), which exhibit is incorporated herein by reference.
* 4.10 Form of Warrant Certificate, filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-1 (Registration
No. 33-73608), which exhibit is incorporated herein by
reference.
* 4.11 Form of Indenture, dated as of July 15, 1988, between the
Registrant and MTrust Corp., National Association, with
respect to the Registrant's Convertible Subordinated
Debentures due July 15, 2008, filed as Exhibit 4.25 to the
Registrant's Registration Statement on Form S-3 (Registration
No. 33-21159), which exhibit is incorporated herein by
reference.
* 4.12 First Supplemental Indenture, dated as of August 8, 1988,
Second Supplemental Indenture, dated as of November 10, 1988,
and Third Supplemental Indenture, dated as of April 10, 1991,
by and between the Registrant and Ameritrust Texas, National
Association, the successor to MTrust Corp., National
Association, relating to the issuance of the Registrant's
Convertible Subordinated Debentures due
</TABLE>
<PAGE> 25
<TABLE>
<S> <C>
July 15, 2008, filed as Exhibit 4.3 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31,
1990, which exhibit is incorporated herein by reference.
* 4.13 Form of Fourth Supplemental Indenture, by and between the
Registrant and Texas Commerce Bank, National Association, as
successor to Ameritrust Texas, National Association, formerly
known as MTrust Corp., National Association, filed as Exhibit
4.10 to the Registrant's Registration Statement on Form S-4
(Registration No. 33-98876), which exhibit is incorporated
herein by reference.
* 4.14 Trust Deed, dated March 21, 1996, between the Registrant,
Sunshine Precious Metals, Inc. and Marine Midland Bank and
Form of Note, filed as Exhibits 4.5 and 4.6 to the
Registrant's Registration Statement on Form S-3 (Registration
No. 333-06537), which exhibits are incorporated herein by
reference.
* 4.15 Warrant Agreement, dated as of June 21, 1996, between the
Registrant, Rauscher, Pierce & Clark and HSBC Investment
Banking Limited and Form of Warrant Certificate, filed as
Exhibits 4.7 and 4.8 to the Registrant's Registration
Statement on Form S-3 (Registration No. 333-06537), which
exhibits are incorporated herein by reference.
* 4.16 Specimen form of Warrant to Purchase Common Stock issued on
November 24, 1997, filed as Exhibit 10.12 to the Registrant's
Registration Statement on Form S-3 (Registration No.
333-41641), which exhibit is incorporated herein by reference.
* 4.17 Specimen form of Senior Convertible Promissory Note, filed as
Exhibit 10.13 to the Registrant's Registration Statement on
Form S-3 (Registration No. 333-41641), which exhibit is
incorporated herein by reference.
* 4.18 Amendment, dated December 11, 1998, to Warrants to Purchase
Common Stock issued on November 24, 1997, filed as Exhibit
4.16 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, which exhibit is
incorporated herein by reference.
* 4.19 Specimen form of 5% Convertible Promissory Note due January
28, 2001 filed as Exhibit 4.2 to the Registrant's Current
Report on Form 8-K dated January 28, 1999, which exhibit is
incorporated herein by reference.
* 4.20 Letter Agreement dated September 22, 1999 by and between
Sunshine Mining and Refining Company, on the one hand, and
Westgate International, L.P. and Elliott Associates, L.P., on
the other hand, filed as Exhibit 4.20 to the Registrant's
Registration Statement on Form S-3 (Registration No.
333-88293), which exhibit is incorporated herein by reference.
** 5.1 Opinion of Haynes and Boone, LLP.
** 23.1 Consent of Haynes and Boone, LLP (included in the opinion
filed as Exhibit 5.1).
** 23.2 Consent of Ernst & Young LLP.
** 24.1 Power of Attorney (set forth on signature page hereof).
</TABLE>
- ----------
* Previously filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 5.1
January 7, 2000
Sunshine Mining and Refining Company
877 W. Main Street, Suite 600
Boise, Idaho 83702
Re: Registration of 4,535,732 Shares of Common Stock
Gentlemen:
We have acted as counsel to Sunshine Mining and Refining Company, a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company with the Securities and Exchange Commission of a Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"). The Registration Statement registers
the proposed offer and sale by certain stockholders of the Company (the "Selling
Stockholders") of up to 4,535,732 shares (the "Shares") of the Company's common
stock, par value $0.01 per share ("Common Stock"), to be issued upon the
conversion of or as payment of interest on the Company's currently outstanding
Senior Convertible Promissory Notes (the "Notes"). Pursuant to Rule 429 of the
Securities Act, this Registration Statement is registering 2,500,000 additional
shares of common stock and relates to the remaining unissued shares of common
stock as of January 4, 2000 of 2,035,732 under a registration statement on Form
S-3 (SEC File No. 333-41641).
In connection therewith, we have examined and relied upon the originals, or
copies certified to our satisfaction, of (i) the Certificate of Incorporation of
the Company, as amended (the "Certificate of Incorporation"); (ii) the Bylaws of
the Company (the "Bylaws"); (iii) the minutes and records of the corporate
proceedings of the Company with respect to the issuance and sale of the Notes
and the issuance of the Shares; (iv) the Registration Statement and all exhibits
thereto; (v) the Registration Rights Agreement, dated as of November 24, 1997 by
and among the Company and the Selling Stockholders, among others; (vi) the
Notes; (vii) the Purchase Agreement, dated as of November 24, 1997, among the
Company and the Selling Stockholders, among others; (viii) the specimen Common
Stock certificate filed as Exhibit 4.2 to the Company's Registration Statement
on Form S-1 (Reg. No. 33-63446); and (ix) such other documents and instruments
as we have deemed necessary for the expression of the opinions contained herein.
In making the foregoing examinations, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals,
and the conformity to original documents of all documents submitted to us as
certified or photostatic copies thereof and the authenticity of the originals of
such latter documents. As to various
<PAGE> 2
Sunshine Mining and Refining Company
January 7, 2000
Page 2
questions of fact material to this opinion, where such facts have not been
independently established, and as to the content and form of the Certificate of
Incorporation, the Bylaws, certain minutes, records, resolutions and other
documents or writings of the Company, we have relied, to the extent we have
deemed reasonably appropriate, upon representations or certificates of officers
of the Company or governmental officials and upon documents, records, and
instruments furnished to us by the Company, without independent check or
verification of their accuracy. Finally, we have assumed that all formalities
required by the Certificate of Incorporation, Bylaws and the General Corporation
Law of the State of Delaware will be complied with when the Shares are issued.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares to be
issued by the Company upon the conversion of or as payment of interest on the
Notes have been duly authorized and, when issued in accordance with the terms of
the Notes, will be validly issued, fully paid and non-assessable.
The opinions expressed above are specifically limited to the General Corporation
Laws, as amended, of the State of Delaware, and the federal laws of the United
States of America.
This opinion (i) is rendered as of the date hereof, and we undertake no, and
hereby disclaim any kind of, obligation to advise you of any change or any new
developments that might affect any matters or opinions set forth herein, and
(ii) is limited to the matters stated herein and no opinions may be inferred or
implied beyond the matters expressly stated herein.
We hereby consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement and to the reference to
this firm under "Legal Matters" in the Prospectus forming a part of such
Registration Statement.
Very truly yours,
/s/ HAYNES AND BOONE, LLP
Haynes and Boone, LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Sunshine Mining and
Refining Company for the registration of 4,535,732 shares of its common stock
and to the incorporation by reference therein of our report dated February 26,
1999, with respect to the consolidated financial statements of Sunshine Mining
and Refining Company included in its Annual Report (Form 10-K) for the year
ended December 31, 1998, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
--------------------------
ERNST & YOUNG LLP
Dallas, Texas
January 5, 2000
