Lyon Lake Mines calls it quits

Citing a persistent deficit and uncertainty about the completion of a planned reverse takeover by TelPlus Group (one of its technology-based subsidiaries), Lyon Lake Mines (LLL-V) is permanently shutting down its operations.

The company says it has no option but to close as it no longer has the financial resources to maintain its status as a public company. All of its officers and directors have submitted their resignations. Guy Hebert will manage the closure with the help of a specialized firm.

Novontar, Lyon Lake’s subsidiary, will complete reclamation work, which is about 90% complete, at the Beta Vargas mine in northwestern Costa Rica. At the end of 2000, the environmental reserve in trust totalled $156,000, which the company says should be sufficient to obtain the final certificate of conformity.

In September 2000, Lyon Lake announced that it had signed a letter of intent to acquire all the issued and outstanding shares of TelPlus, which would result in a reverse takeover by the shareholders of TelPlus. Lyon Lake says the closing of the transaction (due this fall) remains highly uncertain.

In 1998, Placer Dome (PDG-T)dealt an option on the Cerro Crucitas project in Costa Rica to Lyon Lake, which continued exploration and feasibility work. As gold prices fell, the project, which was justified on the back of Crucitas’s reserve figure, shrank to a 4,500-tonne-per-day mine and mill.

At the time of the deal, Crucitas had a measured and indicated resource of 59 million tonnes grading 1.2 grams gold per tonne, plus an inferred resource of 14 million tonnes grading 1 gram.

A full feasibility study, contracted in 1999, was submitted to the Costa Rican government for approval. However, in the poor investment climate of the time, Lyon Lake never found the financing to bring Crucitas into production.

In May 2000, Vancouver-based Vannessa Ventures (VVV-V) bought the project from Lyon Lake in exchange for 250,000 shares, $25,000 in cash and the clearing of about $500,000 in payables off Lyon Lake’s books.

At Dec. 31, 2000, Lyon Lake had consolidated debts of $1.8 million and assets of $737,771. The company had negative working capital of $1.5 million.

Lyon Lake shares will be permanently de-listed from the Montreal Exchange and the Canadian Venture Exchange on May 9.