A mining outfit in Utah's west desert has shut down operations, furloughed employees and filed for bankruptcy protection after just a year of operation.
Copper King Mining Corp. said Thursday it hopes to emerge stronger from Chapter 11 bankruptcy after reorganizing debts and raising money.
The company, operating as Western Utah Copper Co., controls lucrative iron ore and copper deposits on about 60,000 acres of leased land around Milford. It opened a $60 million mill a year ago and employed 85 people.
"The company ran out of money in middle of a startup phase for a complex and difficult mining operation," said turnaround adviser Anthony "John" Bryan, who is taking over as chief executive. "The plant they built there -- these things are not easy to get up and running. Three-quarters through the process, they just ran out of money."
Copper King said in a bankruptcy filing Tuesday that it was unable to pay for mining leases, workers, lawyers or operations and even had its power disconnected. The filing included minutes of a May 13 board meeting that ended with a vote to declare bankruptcy.
By meeting's end, board chairman David McMullin took up the unpaid wages he said the company owed workers -- many were his "friends and neighbors," he said. The minutes didn't say whether or how the company planned to pay the back wages, but Bryan said he hoped to raise money quickly to call back company executives and workers.
"We're going to get the mining facilities operating profitability," said Byran, chief executive of The Watley Group, a Los Angeles-based bankruptcy specialist. "We take over enterprises and move quickly without a lot of the emotional baggage and a lot of problems the incumbents might have had."
Copper King shareholders "are going to take the biggest haircut," said Charles A. Moskowitz, the company's investor-relations manager -- a hired contractor who says he's owed more than $60,000 for his services.
Moskowitz said Copper King ran into financial and operational problems. "They never got the mill running anywhere near capacity," he said.
Shares of Copper King rose 66 percent to five one-thousandths (0.0005) of a cent in over-the-counter trading Thursday. Moskowitz said the company has issued billions of shares in an "absurd" effort to raise capital. The 52-week high was 1.9 cents last September.
"The mill was built on the back of shareholders," he said.