Merger terms okayed for Cdn Premium, Mahogany Minerals

The boards of directors of Canadian Premium Resource Corp. and Mahogany Minerals have approved an amalgamation ratio for the merger of the two companies. An independent consultant has placed a threshold value of $20 million on the Jolu gold property in Saskatchewan which is their main holding.

Each Canadian Premium shareholder will receive one share of the new company and Mahogany shareholders will get 0.9 of a share. The exchange ratio is subject to regulatory approvals.

Meanwhile, underground development work is well advanced at the Jolu property. By March 24, the decline was in some 1,916 ft and two levels had been established. Ten drill stations have been located in the decline to establish mining reserves on 40-ft centres over 650 ft of strike length in the ore zone. This first-phase program is scheduled for completion by the end of April.

Metallurgical test work has confirmed gold recoveries in the upper levels of the Rod and Rod South zones at better than 96%. Further test work of material from lower levels in the mine is under way.

A drifting program is under way in the Rod and Rod South zones which will include detailed sampling. The purpose of the program is to correlate surface drilling results with underground sampling data which will be used for reserve calculation purposes. Surface drilling has indicated a possible footwall shear lying approximately half way between the Rod and Mallard zones. The Mallard has reserves of 44,000 tons grading 0.50 oz gold.