Midway mill secured with $1 million loan
By Mona Mattei
Squeaking in under the deadline wire, Boundary Sawmills Inc. (BSI) secured a loan this week for $1 million to complete the Midway mill purchase. Working with the Heritage Credit Union over the weekend, Doug McMynn, president of BSI, said they were able to not only cover their outstanding debt to Fox Lumber Sales Ltd., but also hope to pay out another $1 million note. “We were able to accomplish a loan with a low interest rate, and a low principle to clear up the $1 million which was due Aug. 31,” said McMynn. “We’re also negotiating in the next six weeks to also expand that loan to clean up the SIDIT (Southern Interior Development Initiative Trust) loan as well. Therefore, we would have just one mortgage and we can run this thing with the lease payments coming in from Vaagen’s (Vaagen Fiber Canada the contracted mill operator).” McMynn explained that BSI had been working different angles in the last few weeks to get the needed money together by the deadline, with Stephen Hill in Vancouver soliciting shareholders as well as other negotiations including working with provincial and municipal governments. In the end the credit union stepped up to support the business. The mill has been under renovations for the past few months removing old equipment and installing the new, and Project Co-ordinator Mark Deverson said they will be opening as expected on Oct. 7 with a grand opening ceremony planned for later in the month. Logs, purchased on the open market, are starting to build up in the mill’s yard for the upcoming operations. “I think we’ve turned the corner,” said McMynn. “We’re rock solid. We’ve made our commitment, so the royalties are going to be coming 100 percent to us and the lease rate is coming 100 percent to us and we’re basically solid. It’s up to Vaagen’s now to produce and we’re going to sit back and watch them do it!”
Vaagen’s has the option to purchase the mill property from BSI after five years of operations, but can continue as a lessee for 10 years if they choose with an option to renew.
