Nevada gold mining company to liquidate its assets

Friday, March 10, 2000 | 11:15 a.m.

Henderson-based Alta Gold Co. is asking a judge to convert its bankruptcy to a Chapter 7 liquidation filing.

If approved by the U.S. Bankruptcy Court in Reno, the move would allow Alta to liquidate the 11-year-old company and sell off assets to pay creditors.

The company's largest asset is its Olinghouse gold mine near Reno. The company has another mine, Griffon, near Ely and undeveloped copper holdings in New Mexico.

A third property, the Kinsley Mountain Mine near Elko, was operated through 1997 when it closed.

Alta's board of directors, its president and chief executive officer and its vice president of operations have resigned. The company's two remaining officers, John Bielun, senior vice president and chief financial officer, and corporate secretary Margo Bergeson, remain on the job.

Bergeson said Thursday that she and Bielun agreed to remain to assist the court in the liquidation of the company. In addition, an outside expert was appointed by the court to help in the evaluation of the company's assets and liabilities.

A hearing is scheduled March 30 to consider the petition to convert the bankruptcy from Chapter 11, a reorganization, to a liquidation proceeding.

The company had its roots in Nevada as Silver King Mines Inc. and was incorporated in Nevada in 1962, according to a proxy statement filed with the Securities and Exchange Commission. Silver King merged with Pacific Silver Corp. and in 1989 changed its name to Alta Gold Co. Retired businessman Toshiaki Tanaka and oil and copper executive Robert Pratt joined the board of directors in 1987.

Pratt became chairman of the board, president and chief executive officer in 1992.

At the peak of operations in 1998, Alta had about 215 employees.

In 1997 and 1998, the company was in the center of environmental controversies involving its Olinghouse and Kinsley Mountain mines. The Bureau of Land Management investigated charges of oil dumping in the Kinsley mine. The company denied any wrongdoing.

In 1998, environmental groups, the Pyramid Lake Paiute Indian Tribe and rural property owners appealed the BLM's approval of an open-pit mining operation at Olinghouse. The groups said the project would hurt wildlife and water supplies. The BLM, however, approved the project.

Last March, the company reported that production fell at Olinghouse and revenues were hurt by low gold prices.

In April, the company filed for Chapter 11 bankruptcy after taking a $9.3 million charge to reflect the reduced value of its two mines. At the time, Pratt said the company was working to reduce costs and increase production and that daily operations would continue.

By summer, the company decided to sell some of its assets, but the company was unable to find a buyer.

Today, Bergeson said there are about 36 employees involved in gold production and environmental remediation at the two active mines.

She said the company has quit mining at its Olinghouse property near Reno and the Griffon mine near Ely, but processing will continue on ore that already has been mined. She said the company has no estimate of how long that will take and that operations will shut down when that is completed.

The company also said that because of its weakened financial condition, it would not be able to issue any reports on its operations or financial status for the fourth quarter or for 1999.