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Show BUSINESS Standard-Examiner 1 1872 mining law costs U.S. millions Less than $10,000 paid for property WASHINGTON (AP) — Declarng it “the biggest gold heist since the days of Butch Cassidy,” Interir Secretary Bruce Babbitt reluc- t ned a $10 billion Nevada ne over to a Canadian minany Monday \lthough the Goldstnke minein aT iis of . central Nevada is on fi al land, harge only $5 an acre $1 ‘0, and requires s on the minerals that \ “This is the biggest mpoff since e Yar stole Babe Ruth from Red Sox for pocket change,” an t bitt told reporters at a nce. CK DIU } | OU ican 4 A DIOWUPp OI a hep me ‘ check signed by $10 billion, the Goldstrike mine is now theproperty of American Barrick Resources Inc., which obtained the mining claim in 1987 for $62 million from another mining company. The company has been seeking full ownership since early 1992 through a “patenting” process outlined in the 1872 mining law. Babbitt tried to block the final transfer oftitle, but in March a federal court directed him to turn ownershipof the land over to Barrick by June 20 in compliance with the 1872 law At the news conference, Babbitt said there is no clearer example than the Goldstrike mine that the + 2-year-old law should be rewritn to require a mining company topay a fair market price for such land and pay the government a royalty on any minerals recovered. The law, which covers hardrock minerals such as gold, silver and hung copper, requires no royalty pay- OSIts estimatedto ments. It was enacted in the 19th century to foster mining and development of America’s natural re- copic was him $ 8 billion and Wal-Mart earnings jump 11% require mining companies to pay surface market value for federal land and a royalty on minerals reHe compares the deal to the Boston Red Sox trading Babe Ruth for ‘pocket change.” sources, but Babbitt argued “any logic for it disappeared well before World War II.” covered. But the two bills differ widely and it remains to be seen whether a bill will be enacted by Congress this year. roughly $600 million worth, and mining continues. Officials of Barrick strongly defend their purchase and dispute that they are getting a natural treasure and paying virtually nothing Barrick applied for a patent for Goldstrike in the spring of 1992. It in return. took them only five months to get an interim authonzation for owner- someone can suggest that Barrick is ship undera “fast-track” processing “It’s difficult to understand how reaping a windfall of $8 (billion) to $10 billion,” Pat Garber, Barrick’s policy initiated by the Bush administration. When Babbitt a year ago put the brakes on the patenting process, Barrick filed suit, charging him with ignoring the 1872 law. A federal judge agreed and directed general counsel, said in a recent in- Babbitt to issue the final patent. Garber said that Barrick took a risk in 1987 when it paid $62 million for the claim when therichness of the ore was not known, and terview. “... Through the use of innovative newtechnologyand risk of our own capital (we) created value where previouslyit didn’t exist. Congress has been debating changes in the lawfor years, but mining interests and many Western lawmakers have fought attempts to rewrite the law. They are worried that if it is changed along the lines espoused by the Clinton administration some mines will no longer be profitable, resulting in a loss of jobs. the government between $640 million and $800 million if the mine is ing the technology that is being as rich as believed. Both the House and Senate have approved separate bills that would Last year, 1.4 million ounces of gold were taken from the mine, He conceded that today Goldstrike “probably is the most profitable gold mine in North America.” - NowBarrick will be exempt from royalty payments. Under a proposal approved by the House, which calls for an 8 percent royalty, Barrick would have had to pay has invested roughly $1 billion in the project, half of that in developused to extract the gold. 12.58 at 3,684.08 ai 11 a.m. BRIEF CASES BUSINESS PEOPLE Jerry Peterson was named Terracon Consultants Western Inc.'s regional manager for construction materials testing and geotechnical Peterson engineering services for Utah and Idaho. Based in Boise, Peterson has 26 years of experience in the Ccasting for a record field. SS BULLETIN BOARD ——TES aR Dow Jonesindustrials May 23-25 — SALT LAKE CITY — Treasury Management Association conference “Career Express West” on topics including cash managementessentials, bank relations, treasury management and collections. Marnott Hotel. Kmart profits plummet 22% due to slow sales Information, 301 907-2862. Sek NATIONAL Wal-Mart Stores Inc. said Monstrong sales gave the naest retailer an | 1-percent Delta retirees sue over benefits rst quarter earnings. But had a less rosy first ‘porting a 22-percent drop ATLANTA — A group of profits Delta Air Lines retirees is suing the carrier to restore benefits Wal-Mart's strength — and that f omer’ other big discounters — helped le sales at Kmart’s flagship dis- that the carrier either reduced or eliminated. The plaintiffs say the lost benefits are worth nt store chain The first quarter was generally more than $100 million. r the retail industry. Severers have already reported irnings Attorneys for 22 Delta retirees said Monday they will increases for the quarter ask a federal judge in Atlanta some companies, including Kmart have been stymied by competition and their own internal to grant them class-action status, making potential plaintiffs of 1,800 Delta oDiems employees who took early Wal-Mart Stores Inc. Wal-Mart said strong sales of od, electronics and gardening products contributed to its show- retirement in 1992. Felton Hudson, a founderof the Delta Retirees Association, formed this year to press the group's claims, said the suit The companyreported earnings f nearly $498.5 million, or 22 cents per share, in the quarter ended April 30, up from the nearly $450.7 million, or 20 cents per share, for the first quarter oflast year. Sales rose 27 percent to nearly $17.69 billion from $13.92 billion. Despite the gain, Wall Street was lisappointed, perhaps because Wal-Mart’s earnings rose at a lower pace than the companyhas reported in the past. Wal-Mart stock fell $1.12% a share to ’ $22.87 on the New York Stock Exchange. Compared with last year, comparable store sales — those from stores open at least a year — were up 10.6 percent for the quarter but dropped 1.7 percent at Wal-Mart's Sam’s Club division. Sam’s Club has been hurt for some time by competition in the warehouse club industry Wal-Mart division stores saw a 14.6 percent increase in comparable sales At the end of April, Wal-Mart had 1,960 Wal-Mart stores, 77 Supercenters, 427 Sam’s Clubs, and 22 Canadian Wal-Mart stores. Kmart Corp. Kmart reported earnings of $18 million, or 4 cents a share, in the quarter ended April 27, down from $23 million, or 5 cents a share, a ur earlier Sales rose to $7.81 billion from $7.35 billion Excluding theeffects of the sales t the PayLess Drug Store and PACE Membership Warehouse hains and one-timecharges, 1994 rt rst-quarter earnings dropped 69 Kmart, the nation’s second-bigretailer behind Wal-Mart, had ed last monththat profits uid be well below last year's first-quarter earnings, so Wall Street wasn’t surprised by theresults. Kmart stock slipped just 12'4 cents to $15.12 on the NYSE. seeks benefits changes and back pay worth more than $100 million. Members of Hudson's group The Associated Press What Geneva Steel near Orem cails the world’s largest continously cast steel slab rolis out of the new $150 million continuous caster. The caster produces steel at lower cost and of superior quality. Previously, steel ingots were manipulated and Clearfield experiencing business boost 4 new businesses to locate in city is expanding its existing facility. Chandler said: individually the Standard-Examiner Daws Bureau CLEARFIELD — A waveof businesses locating or expandingin Clearfield has city officials forgetting the days when the city struggled with 1 percent annual economic growth. In the last two weeks four new businesses have announced plans to locate in the city, while a fifth company is in the process of a major expansion. “Some ofthese deals have been working for a long time andthey are just starting to come through,” said city Economic Development Director H. Kay Chandler. Businesses planning new developments in Clearfield are General numberof newjobs to the area, but small business has been “the life blood ofClearfield economics” adding to the tax base. During the 1980s the city’s eco- declined to name the customer. ‘Some of these deals have been working for a long time and they are just starting to come through.’ — H. Kay Chandler nomic growth averaged about | percent annually. Chandler said that trend changed in 1991 after the city started its own redevelopment agency and soon landed Tom Wi- negar’s Thriftway, Clearfield’s first full-time grocer since Smith’s Food & Drugleft the city two years earlieT. In 1993 Clearfield experienced a 3 percent growth, about $400,000 more in general revenue over the previous year. City officials project those numbers to go up even more this year. “Frankly, we are doing a better job marketing Clearfield,” Chandler said. The companies locating in the city range from national corporations to local investment groups. General Fasteners, a national dis- tributor of fasteners based in Livonia, Mich., recently leased a 6,000 square-foot distribution center at the Freeport Center. Eugene Broder, spokesman for General Fasteners, said the company came to Clearfield to serve a “dedicated” Utah customer, but Recreation Technology of Las Vegas is in the process of building WASHINGTON (AP) — Housingstarts fell 2.5 per- Housing starts Seasonally adjusted annual rate, millions of units cent in April, the government said today. Analysts had expected rising mortgage rates to begin to slow down residential construction. Drops in the South and West more than offset gains in the Midwest and Northeast. The Commerce Department said construction of new homes and apartments totaled 1.46 million at a seasonally adjusted annual rate, down from a revised Antonini noted that the first quarter is the least important in the retail calendar. “Westill expect improvedresults for 1994,” he said BEES MJJASOND 1993 JF MA 1994 23) (4.2) 11.45) April’93 Mar.’94 April 94 Source: U.S. Dept. of Commerce The Associated P ress South, just east of The Canned Food Store. Mike Jeppsen, co-owner of Recreational Technology, said the rapid growth of north Davis County and the high numberof families in the area was attractive to his company. “We look for locations with 150,000 to 300,000 residents with one or less recreation facilities in the area,” he said. The park, expected to open July 4, will have batting cages, a go-cart raceway, sand volleyball pits and a children’s playground. Barlow Corp. plans to develop an 8-acre professional medical park at 1350 E. 1450 South. Duncan Barlow, a broker for the firm, said connecting roadways will be developed in order to sell '-acre to 2See WAVE on 5B housing starts in 1994 to 1.38 million, down from its 1.43 million prediction at the beginning of the year. “Housing is one of the most interest-sensitive sec- tors of the economy and our members are alreadyfeeling the effects of higher rates,” said Tommy Thompson, an Owensboro, Ky., builder and association president. The home builders’ association said a jump in mortgage rates from 7 percent to 9 percent would add 1.49 million in March. The initial March estimate was $209 to the monthly payment on a $150,000 mort- 1.47 million. The 12.3 percent jump in March was partlya rebound from a weather-related 21.2 percent plunge in January and a slower-than-expected 4.5 percent revival in February. Starts shot up 14.7 percent in December to a 1.61 million rate. But many analysts said rising rates, after initially pushing some tentative buyers into the market, would slow consumer demand and builder enthusiasm. They were predicting a 1.45 million starts rate last month. Fixed-rate, 30-year mortgages averaged 8.39 percent in April, up from 7.75 in March and a 25-year lowof 6.74 percent last October, according to the Federal Home Loan Mortgage Corp. Theyhad risen to 8.77 percent by last Thursday, highest in two years. gage. The National Association of Home Builders told a news conference Monday it had revised its forecast for announced in mid-1992 thatit would reduce medical benefits for early retirees leaving after Jan. 1, 1993. They claim they were assured their benefits would not later be reduced. But, in mid-1993, Delta cut benefits for all retirees. Delta spokesman Todd Clay said the company informed the retirees in advance that benefit packages were subject to change. WORLD a 3.4 acre sports park at 305 E. 200 Construction of new homesfalls 2.5 percent man Joseph Antonini said Kmart plans to sell minority stakes in its specialty operations later this year Fasteners, Barlow Corp. of Layton, High Tech Stoves, and Recreation Technology. North Davis Cabinet businesses wi'l not bring a high By BRYON SAXTON Although Kmart reported strong sales in its specialty store businesses, especially OfficeMax office supply stores and The Sports Authority, April sales were weak in the Kmart discount stores, chair- Kmart is in the midst of renovating and replacing its older discount stores. The company has been pressured by increasing competition from Wal-Mart, Target and other discount store operators rolled into slabs — in a more expensive and time-consuming process. The new caster direct-rolis steel into slabs. The slab produced Mondayis a record 15 feet 5.5 inches long, 10 feet 5 inches wide, 8.6 inches thick and weighed about 27 tons. left Delta after the carrier Randy Smith, a builder from Walnut Creek, Calif., told reporters the higher rates initially had the effect of pushing “fence-sitters” into the market in March out of fear of even higher rates. But since then, he added, prospective buyer traffic has dropped dramatically. In fact, the association said a May survey of 415 members showed that the number reporting “high to very high” traffic had been cut nearly in half since January, to just 21.7 percent from 39 percent. Applications for building permits, often a barometer of future activity, rose 4.4 percent to a 1.37 million rate, up from 1.31 million a month earlier. But applications for single-family homes, which represent about 80 percent of housing starts, were unchanged from March. Permits for multi-family structures shot up See HOME on 58 Lioyds of London loss: $3 billion LONDON — Lloyd's of Londonsaid today it lost 2.048 billion pounds, or $3.072 billion, in 1991, a sizeable loss but far less severe than the financial hits the giant insurance market had suffered in previous years. The loss brought the total deficit for the four years ended in 1991, the latest reporting year, to more than 7 billion pounds, or $10.5 billion. Lloyd's, famed for insuring everything from jumbo jets to movie stars through a unique system in which individuals serve as underwriters, suffered from a string of natural disasters. Catastrophes in 1991 included Typhoon Mireille, which hit Japan and costup to $5 billion, and the Oakland, Calif., fires that destroyed thousands of expensive homes and cost around $1.2 billion. CONSUMERTIP Copier toner scam warming SALT LAKE CITY — The Utah Attorney General's office is warning businesses about a telephone solicitation scam in which a California company Calls businesses offering “great deals" on cases of copier toner — but actually charges up to five times the price charged by local office supply stores. Victims have reported that the solicitor phones a business and acquires the names of employees responsible for ordering supplies — than calls back using an employee's name to “confirm” the order - — Standard-Examinerstaff and wire services |