VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/20/09 -- SNS Silver Corporation ("SNS" or the "Company") (TSX VENTURE: SNS) publicly announces its decision to discontinue its possession of the Sunshine Mine in Kellogg, Idaho.
On May 15, 2009 the Bankruptcy Court for the United States District Court, District of Idaho, entered the Memorandum of Decision on Motion to Assume Lease and Motion for Approval of Post-Petition Financing (Dkt. 131) granting Sterling Mining Company's ("Sterling") motion to assume the lease it held on Sunshine Mine until vacating the premises on February 19, 2009. Therein, the District Court concluded that Sterling, as bankruptcy debtor, did not unequivocally abandon its lease and thus had the right to re-assume. Since that time, SNS has worked diligently to assure that the Sunshine Mine was properly cared for and that SNS would be reimbursed the costs it incurred during the time it has cared for the mine. However, the reality of that decision is that SNS was unable to proceed with the plans and goals it was guaranteed under the lease it agreed to and had been forced into a care and maintenance role by the litigation tactics of Sterling in its bankruptcy proceeding.
Following a court trial regarding the establishment of cures and reimbursements that Sterling is responsible for, it was determined that the bankruptcy litigation would not be concluded quickly making continued care and maintenance by SNS impudent and not in the best interest of its shareholders.
Bradley J. Dixon, lead trial counsel for SNS with Stoel Rives LLP states, "At trial, SNS and SPMI presented excellent evidence regarding the various cost and reimbursement figures that Sterling will need to provide payment and reasonable assurance for. It is likely that the bankruptcy proceeding, given the trial tactics of the parties, will continue for quite some time. Although I am confident that the Court will quickly determine the types and amounts of reimbursement that Sterling will be responsible to pay SNS for its time caring for the mine, it may be quite some time before Sterling presents and obtains approval of a bankruptcy plan from the Court. In the meantime, we will continue working with SPMI and will aggressively seek reimbursement of the expenses incurred by SNS during the time that SNS prevented serious damage to the Sunshine Mine following Sterling's abrupt abandonment of the property."
David Greenway, President and CEO of SNS Silver, said, "I am disappointed that SNS will not have the opportunity to put the Sunshine Mine back into production and succeed with the excellent plans we had to make this mine profitable again where Sterling failed. We sincerely appreciate having the opportunity to work with SPMI and Robert Mori, and look forward to opportunities to work with them in the future.
