In Stockwatch Gold Summary
Gold Summary for Dec. 24, 2015
2015-12-24 13:45 ET - Market Summary
by Stockwatch Business Reporter
New York spot gold gained $6.70 to $1,076.90 on Thursday. The TSX Venture Exchange rose 5.40 points to 516.83 while the TSX Gold Index gained 2.92 points to 135.55. Most Canadian gold miners were strong today. Kinross Gold Corp. added 11 cents to $2.75 on 2.25 million shares while New Gold Inc. (NGD) added 23 cents to $3.37 on 875,000 shares.
John Anderson and Benjamin Mossman's Banks Island Gold Ltd. (BOZ), which bills itself as "British Columbia's newest gold producer with expanding operations and aggressive exploration," has delivered its employees and shareholders a big lump of coal for Christmas. Banks Island, unchanged at one cent on 1.60 million shares, says it has insufficient funds to maintain operations and is laying off all its remaining employees effective Dec. 31. Worse, for shareholders at least, is the fact that three major creditors have filed claims against the company and the government has confiscated its mining reclamation bond.
Banks Island attempted a big private placement late last month, seeking to sell 100 million shares at three cents, or 10 million at 30 cents following a proposed 1:10 share consolidation. The $3-million was to be spent on accounts payable, equipment purchases and bureaucratic paperwork needed to get its Yellow Giant mine ready to resume operations. The company had to suspend mining and put Yellow Giant on care and maintenance in the summer until it could rectify permitting and regulatory issues at the mine. (The problem began in June when a water spill at the mine caused some minor pollution.)
Unfortunately, the company could not close the placement and so the mine will remain closed. Even if competed fully, the planned placement would have barely dented Banks Island's mounting working capital deficiency, which topped $10-million at the end of August. Mr. Mossman is one of four continuing directors of Banks Island; the other three are Jason Nickel, Frederick Sveinson and Mr. Anderson, who is the company's chairman. Mr. Mossman, chief executive officer since 2011, did not explicitly say he was among those employees terminated, but it seems unlikely he will keep getting his $169,000-a-year salary.