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Show Tbe Salt Lake Tribune, KenilCC011 Hopes lo By Joe Rolando Tribune Staff Writer Kennecott has divided its $400 n modernization project into two phases to expedite securing the necessary state mining permit, and could begin construction on the first phase as early this spring That was the thrust of what Ken May, associate director of mining for the Utah State Division of Oil, Gas & Mining, told the Board of Oil Gas & Mining. The information was presented Thursday during a briefing session preceding the board's monthly meeting. While the permit Kennecott is requesting, known as the Notice of Intention to Conduct a Mining Operation," must be approved by the uivision, the board would have to ap-p- i ove the form and amount of surety bond for the modernization project. A surety bond is a type of insurance where a third party the surety promises another party will make good on its obligation. If the debtor defaults, the surety is primarily liable for the debt. In the case of Kennecotts modernization, surety bonds are required by the state to insure the company reclaims the land to its original state when mining on it ceases. Mr. May said the first phase of Kennecott's modernization generally will involve construction of the grinding facilities and access roads. He mil-;.o- Start Firsl Phasc said the second phase will involve the conveyors from the open pit and the slurry line to the smelters. However, Dianne R Nielson, director of the division of Oil, Gas and Mining, told The Tribune, she understands a portion of the conveyor system from the mine to the proposed grinding mill is included in the first phase Dr. Nielson said the division agreed to review Kennecott's project in two phases because the company wants to finish the construction work within a certain time schedule "This will enable them to initiate some of the construction as soon as possible," said Dr. Nielson. If we handled the entire project in one phase it would take us longer to grant the permit because we would be dealing with a larger amount of land. There would also be more revi- While the division will be going through the permitting process twice for Kennecott's project, technically it will only be issuing one permit, said Dr. Nielson. Mr. May said when Kennecott applied recently to the division to construct phase one, it proposed to use soil beneath the topsoil for the access roads and new mill near Copperton But state regulations require mining emerges, the division can allow Kennecott to begin work after the board determines the companys surety bonding requirements. The division will follow the same procedure for phase two, Dr. Nielson fully-dilute- - o fully-dilute- fore. Lower earnings for 1985, primarily reflect first half losses when income was hit by aggressive efforts to reduce assets. That included the foreclosure sale of a large farm operation in southern Idaho. Cost of carrying and servicing nonperforming assets, or loans, were a heavy drag on earnings throughout 1985, he added. asConsolidated sets by year-en- d were $194 million, up from $156 million at year-en- d 1984, but below the 1983 peak of $213 million, he said. Resurgence in level of assets in 1985, a First Security spokesman said, was primarily result of the real estate slump in the Park City area. The assets represent a paradox for the firm, Mr. Eccles said. For decades, the companys traditional commitment to growth and development had made it the leading source of construction and mortgage funds in the Intermountain Area.. But with the real estate market slump beginning in 1982, First Security was faced with a sharp increase in assets. The prolonged duration of the slump, he noted, has compounded the problem severely limiting our opportunities to dispose of foreclosed properties. Fortunately, most of the non-pe- r said. asset-liabilit- By Steven Oberbeck Tribune Staff Writer Citing its deteriorating financial condition, CFS Financial Corp. has sent a letter to its investors giving formal notice that it has resigned as the general and managing partner in all of the limited and general real estate partnerships it sponsored. In a letter dated Jan. 22 and signed by J. Gary Sheets, the president of CFS, the financially troubled investment company told investors in 37 partnerships that they need to find someone to replace CFS as their managing and general partner. CFS has offered to its investors a proposed schedule of partnership meetings in which the problem of finding new general and managing partners will be considered. The company's financial condition continues to decline, the letter noted, and although the company presently intends to file a bankruptcy petition there are no plans to file prior to the last week in February. In most cases a general partner is financially liable for all debts of the partnership without limitation. Limited partners are liable for the partnership debt only up to the amount they originally invested. It is our desire to complete the transfer of management authority to successor general partners prior to our involvement in bankruptcy proceedings, Mr. Sheets said in the letter. Mr. Sheets said in the letter that CFS has not been entirely successful in finding replacement general partners for its investors. "For example, the letter said, we had hoped by this date to have executed a binding contract, subject only to the approval of affected partners, with the Knight Austin Corporation of Richmond, Va., calling for Knight Austin to become general partner and property manager for ten or more of our real estate partnerships. However, last Friday, Jan. 17, Knight Austin informed us of its decision not to proceed further with the negotiations. The company does not have the financial or personnel resources to continue the search for a qualified successor general partner. Neither does it have the ability to continue to effectively manage partnership assets much beyond the end of February 1986." The exact impact upon the companys investors from CFS withdrawal was not clear from the letter and CFS executives could not be reached. Ground ore from the new mill will be transported to the floatation facilities at the Magna and Arthur concentrators through a slurry pipeline replacing the existing operation. high-cos- t 1D and our five neighborhood health centers, Southwest Emergency Center, and our Industrial Clinic. Also specialized services including psychiatry, rehabilitation, wellness, cardiac, breast care, diabetic treatment, eye care, hospice, Lifeline emergency response and short-sta- y surgery. 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Learn about the help available at Holy Cross Hospital, near downtown, Holy Cross Jordan Valley Hospital to the south First Security Reports Gain Of Income for 4th Quarter City-base- with the latest grinding mills and ball mills, He said the new mill will be fed from the open-pi- t mine with a new crushing and conveying system TOR PHONE y C13 by Early Spring yet been scheduled, will determine the soils nutritional v. lue, said Mr contention. Basically, the tests, which have not 21, I'Wfi SAS (CLOSE AS sion . , She said the division will first review the first phase of the project and issue a tentative finding it plans to approve the Notice of Intention to Conduct a Mining Operation permit. She said there must then be a period for public comment on the project, and if no adverse comment forming loans are secured by western real estate, he said. None is a foreign entity. Only a small percentage are direct energy loans. Mr. Eccles said the company expects further gains in resolution of the assets problem. The expected improvement in economic conditions and continued lower interest rate levels will have a beneficial effect. Further, amendments to proposed tax reform legislation would allow continued deduction of mortgage interest on a second home. It should remove a tremendous cloud over the market for second homes and significantly improve the market for recreational property sales in our region. Mr. Eccles said the firms consumer loan level gained 15.6 percent in the year; commercial loans were up 6.6 percent, and credit card loans were ahead 27 percent. Total loans and leases outstanding at year-en- d were $3.6 billion, up 7.1 percent from the 1984. Stockholder equity reached a record high of $358 million. Primary capital reached $406 million, or 7.7 some 40 perpercent of total assets cent above percent regulatory primary capital minimum of 5.5 percent, he said. Loan growth occurred, he said, in spite of the designed cut in the firms fixed-rat- e real estate portfolio which has been reduced to 24 percent of total loans and leases from 36 percent two years ago. This is an ongoing strategy designed to protect earnings performance from interest rate fluctuay tions by better balancing our rate sensitivity. An important part of the strategy is originating mortgages and selling them into the national secondary market, he said. Some $485 million in real estate loans were sold, markedly increasing funds available for reinvestment in the area, he said. First Security reined in deposit and asset growth, he said, as matter of maintaining balanced growth and a strong capital base during these volatile times. While the year-enlevels were at a record high, deposits were up only one percent to $3.8 billion; assets, up four percent to $4.3 billion due. companies to move and stockpile topsoil for that use Mr. May said Kennecott claims the subsoil is just as capable of promoting revegetation as topsoil. Dr. Nielson said the division is working with Kennecott to establish a procedure for testing plots of subsoil so the company can verify its HOII CROSS H et Income for Year Down First Security Corp.s fourth-quartnet income was ahead of both the and previous quarters, year-ag- o Spencer F. Eccles, president and chairman, reported. Net income for the year was down, however, mostly because of first-hal- f losses, he said. d The Salt Lake regional financial services company had fourth quarter net of $6.7 million or 52 cents a share on d basis up 11 percent over the $6 million of the year-agquarter. The net was up 7 percent over the $6 2 million earned in the third quarter solid evidence of our continuing earnings momentum. It was the third consecutive quarter of gain, he said. Net income for the year was down to $19 million, or $1.53 a share on a d basis, compared to $23.1 million, or $1.83 a share, the year be- 0f Modernization Friday, January 1 rail |
