ENGLEWOOD, Colo., March 17 /PRNewswire/ -- Echo Bay Mines Ltd.
(Amex: ECO; Toronto) announced today that in light of 18-year lows in the gold
price, the company has elected to exercise its right to defer the April 1,
1998 cash interest payment to holders of its $100 million capital securities.
Under the terms of the capital securities, issued in March 1997, the
company has the right to defer interest payments for up to 10 consecutive
semiannual periods. During the deferral period, interest on the securities
will accrue at the rate of 12% per annum, compounded semiannually, an increase
of one percent. In addition, no dividend may be paid to equity holders during
the deferral period.
The second semiannual 1998 interest payment date is October 1, 1998.
Management and the Board of Directors in the interim will review the company's
financial position and then-current gold market conditions to decide whether
to extend the deferral period. Interest accrued during the deferral period is
required to be paid in cash to the capital securities holders at the end of
the deferral period.
At its discretion, the company may satisfy its deferred interest
obligation by delivering common shares to the trustee for sale, the proceeds
of which would be used to pay the deferred interest to the capital securities
holders. The company has no current plans to sell common shares or to deliver
shares to a trustee for sale.
Echo Bay mines gold and silver in North America. The primary markets for
its shares are the American and Toronto stock exchanges.
SOURCE Echo Bay Mines Ltd.
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Related links:
http://www.echobay.com
CONTACT:
Investor: Robbin Lee of Echo Bay Mines Ltd.,
303-714-8829
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