Blackbird, Galveston deal sign of peace with Pezim

Blackbird Resources, a private company controlled by Ned Goodman, Peter Steen, Timothy Hoare and several other directors of Royex Gold Mining Corp and International Corona Resources, has completed a deal wih Murray Pezim’s Galveston Resources.

“It’s a declaration of peace with Murray Pezim,” Mr Goodman told The Northern Miner during an interview in Toronto. Just three months ago, Mr Pezim was vowing to wrest control of Corona from Royex — a company which Mr Goodman was largely responsible for building.

More importantly, the deal looks like a good piece of business. Blackbird, which is the largest shareholder in Royex outside of Corona, owns an interest in a colemanite deposit in California’s Death Valley. Colemanite is a boric acid mineral which Blackbird plans to produce from a solution mining operation starting this year.

“It’s a very attractive property,” Mr Goodman says. By 1989, the property is expected to yield 100,000 tons per annum of mineral at a cost of $105(US) per ton. Depending on grades, the product can be sold for up to $600 per ton. An average price is $450 per ton, Mr Goodman noted. That would leave a gross operating profit of $34.5 million per year. The 100,000 ton figure represents only 5% of the North American market for boric acid product.

The project will require a capital expenditure of $50 million in the form of 10 $5 million modules. By November, the first module will be in operation as a pilot plant.

The deal with Mr Pezim will see Blackbird merged with Galveston. The latter company trades on the Toronto Stock Exchange. However, to prevent Mr Pezim from having control over Blackbird’s Royex holdings, the merged company will be controlled by a voting trust — management of which will lie with Mr Goodman. Galveston’s major asset is a block of 1.5 million warrants convertible into shares of Corona. If exercised, Galveston would hold a 6% interest in Corona.