Silberman Firm Faces a Major Money Crisis
In the wake of his arrest on money-laundering charges, Richard T. Silberman was replaced Monday as chief executive officer of financially troubled Yuba Natural Resources, the company announced.
Meanwhile, to many observers, the operations of Yuba Natural Resources remain as murky as the Yuba River. The dealings of the mining company that owns 9,900 acres along that waterway in Northern California are difficult to comprehend as outlined in its public disclosures.
What is apparent, however, apart from Silberman’s problems, is Yuba’s potentially crushing liquidity crisis. Current liabilities of $10.7 million as of Dec. 31 outweighed current assets of $425,000 by a 20-1 ratio. And the company was due to pay off a $5.4-million loan to Bank of America on April 3, financial statements say.
Board Meeting Today
Yuba Director Alan Aiello, interviewed briefly Monday at corporate headquarters in the Imperial Bank Tower, refused to comment on financial matters. Peter Jensen, the new chief executive, was not available. Silberman apparently retains his title as Yuba chairman, at least until a board meeting to be held sometime today.
“Yuba is open for business, and we are cooperating fully with the authorities,” Jensen said in a prepared statement released Monday afternoon. “We have not seen any indication so far of direct involvement by Yuba in the alleged laundering scheme. However, our board intends to authorize an independent investigation.”
The company’s stated purpose is to extract extremely minute amounts of gold from large quantities of “alluvial” gold ore deposits in a river that has been mined extensively since 1905. But the high cost of mining and its relatively small returns have caused periodic suspensions of activity, as well as changes of ownership, at Yuba over the years.
In 1987, Yuba netted an average of less than a hundredth of an ounce of gold for each cubic yard of ore dredged and run through its complex extraction process. The company also sells aggregates, a substance used in concrete and other building materials.
The company’s disclosure statements describe a welter of stock deals, joint ventures, partnerships and subsidiaries set up to finance its mining operations. According to its public disclosures, the company has been involved in legal disputes with federal and state governments and its neighbors over its property rights.
But the bottom line is clear enough. Yuba Natural Resources lost a total of $6.5 million during the four fiscal years from 1984 through 1987. It would have lost money in 1988 had it not been for the $5-million sale of land and mineral rights. For the first nine months of the current fiscal year, Yuba is running a $2.6-million deficit.
Excluding the sale of land and mineral rights, Yuba’s annual revenues from operations have not exceeded $2 million in any fiscal year since 1984.
Despite the small change involved, Yuba has somewhat mysteriously been able to attract prominent investors and board directors, including M. Larry Lawrence, Lynn Schenk, Robert O. Peterson and James Mulvaney. Convicted swindler J. David Dominelli was also a major investor in the company at one point.
Over-the-counter trading of Yuba stock was suspended briefly Monday morning, with the stock closing at $.625 per share, down 3 cents. The stock has trended lower, from a high of $2.25, over the past 15 months.
