Midas options Tisdale claims negotiates fire-sale deal

The troubled Tisdale joint venture is getting a new partner. Midas Minerals (TSE) has completed an agreement giving the company the right to earn a 60% interest at the fire-sale price of $2 million from partners Getty Resources (TSE) and Davidson Tisdale Mines (TSE). Getty and Davidson have spent more than $8 million on the project since 1984.

Following underground exploration, reserves at the Timmins, Ont., property were severely downgraded. Originally, Getty published reserves as high as 823, 850 tons grading 0.36 oz gold per ton. This estimate was difficult to support as a result of poor continuity and complex geology, Getty said late last year. As a result, the reserves were downgraded to 55,000 tons grading 0.23 oz gold. Of that, 40,000 tons was mined by Getty this year and awaits processing on a toll basis in Timmins.

Midas is approaching the project as an exploration play, President Karl Skobe told The Northern Miner. The company plans to focus on testing the mineralized zones below a depth of 500 ft, which was the limit of Getty’s work. Reg Comeau, Getty’s manager of exploration confirmed that, other than a few holes in the 1940s, no deep drilling has been completed on the property.

An expenditure of $1 million must be completed by February 28, 1991 in order to earn a 40% interest. Another $1 million will earn Midas an additional 20%. Getty will remain the project operator.