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$10 Million Infusion Approved for Barrick

30 June 2005

By Richard N. Velotta

LAS VEGAS -- Employees and suppliers of four downtown Las Vegas casinos will get paid thanks to regulators' approval Wednesday of a plan to invest $10 million to keep the parent company afloat.

Tamares Barrick Las Vegas Properties LLC, the company that helped finance Barrick Gaming Corp.'s entry into the downtown Las Vegas casino market as a silent partner in March 2004, has been given permission by Nevada gaming regulators to increase its financial interest in the enterprise while the casinos' landlords sort out whether they will stay in the market or sell out.

The real estate company's investment is in essence buying out Barrick Gaming's 23 percent minority interest in the properties.

In specially scheduled back-to-back meetings, the state Gaming Control Board and the Nevada Gaming Commission approved an application from Tamares Barrick for permission to participate in the operation of the Barrick Gaming's Plaza, Vegas Club, Gold Spike and Western casino properties downtown.

Michael Treanor, U.S. investment manager of Tamares Barrick, the owner of the real estate on which the casinos sit, told regulators at the two meetings that it hasn't been determined whether his company would seek a gaming license and continue to participate in the industry or sell its interests.

Tamares is affiliated with Tamares Group, a private investment company with offices in New York, London and Tel Aviv. It's been a silent partner in the deal because it doesn't have a gaming license and while it helped purchase the casinos from Jackie Gaughan, it doesn't manage them.

Treanor indicated to regulators that the company hasn't sought licensing because it works primarily with real estate investments and not gaming.

If Tamares does apply for a gaming license, regulators expect they'd see an application within three months.

In an interview, Treanor said his company has received unsolicited offers for the properties, but he did not disclose the names of the suitors.

Treanor told regulators his company is injecting $10 million into the operation to meet vendor and payroll obligations for the next three months while executives determine their long-term strategy. In the interim, Tamares Barrick's interests will be represented by Larry Woolf, president of the Las Vegas-based Navegante Group, an international gaming development and management company.

Woolf is a former chairman and chief executive of the MGM Grand.

Treanor said his company, which has a portfolio of about 40 commercial and residential properties in the downtown area in addition to the four casino locations, said Barrick Gaming has not made its loan interest payments to Tamares and that the company has fallen behind on payments to some vendors -- the first public confirmation that Barrick Gaming has been struggling financially.

Sources have said high interest rates have mired Barrick Gaming in debt.

Gaming Control Board and Gaming Commission members focused primarily on getting assurances that the capital infused would meet vendor and payroll responsibilities for Barrick Gaming's 1,900 employees. Officials said $8 million would meet those needs and pay past-due vendors, but Tamares is putting in an additional $2 million as a cushion.

Treanor and Stephen Crystal, president of Barrick Gaming, said after the meeting that they still strongly believe in the long-term viability of downtown Las Vegas, especially with 500,000-square-foot Las Vegas Premium Outlets shopping center operated by Chelsea Property Group and Simon Property Group nearby and the pending opening of the 5 million-square-foot World Market Center.

The city also is expected to announce a project in a 61-acre parcel for a mixed-use development that could include a performing arts center, a medical research facility and high-rise residential units.

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