NEWS ROUNDUP (December 02, 1991)

Under a recent joint venture agreement between Bigstone Minerals (VSE) and Asarco Exploration of Canada, Bigstone has the option to earn a 51% interest in 42 units in Fawcett and MacMurchy twps., near Shining Tree, Ont.

To earn the interest, Bigstone must spend $8,000 on the property before April 3, 1992, another $42,000 by Nov. 1, 1992, and a final $200,000 by Nov. 1, 1993.

Bigstone says Asarco has outlined a number of drill targets on the property. Recently, Fort Knox Gold Resources (TSE) made a significant nickel-copper discovery on its claims in Fawcett Twp., Ont.

Chile’s largest commercial bank recently agreed to commit US$10 million in project financing for the Andacollo open pit heap leach gold project in central Chile.

Capital cost for the project, owned by Dayton Developments (TSE), is estimated at about US$31.7 million, including working capital. The bank is now in the process of syndicating the remaining US$20 million in required financing with five other Chilean banks.

Minable reserves at Andacollo are estimated at 30.4 million tons grading 0.034 oz. gold per ton, including proven and probable reserves of 28.3 million tons grading 0.034 oz. gold.

Dayton hopes to bring the mine into production at the end of 1992 with gold production in 1993 totalling 123,000 oz. at a cash cost of about US$146 per oz.

Annual production is expected to average about 110,000 oz. at a cash cost of US$182 per oz.

A new collective agreement was recently signed by local 7619 of the United Steel Workers Union and Highland Valley Copper, covering the period to Sept. 30, 1993.

The giant open pit copper mine near Logan Lake, B.C., has been operating without a contract since the end of September.

The new contract includes a 32% increase in pension benefits as well as a 5% wage hike in each of the two contract years. The wage increase will push the average union wage to $21.63 per hour by the end of the contract from the previous level of $19.53.

Richard Boyce, president of Local 7619, noted that in addition to wages and pensions, the contract includes a severance package. In the event of a layoff, employees are entitled to a base payment of 40 hours of wages plus a further payment of 40 hours for each year the employee has worked for the company.

Highland Valley Copper is owned 50% by Cominco (TSE), 33.6% by Rio Algom (TSE), 13.9% by Teck (TSE) and 2.5% by Highmont Mining.

Following the completion of a due diligence review, Placer Dome (TSE) revised its option agreement offer to buy a 48% interest in the Ridgeway open pit gold mine in South Carolina.

Galactic Resources (TSE), owner of the mine interest, agreed to the new price although the closing of the sale still depends on a right of first refusal held by Kennecott, 52% owner of the mine.

In addition to the US$16-million cash payment, Placer will assume US$20.3 million in debt related to the mine. The two companies announced their original deal in October, which allowed Placer to acquire the interest for US$18 million in cash plus the assumption of mine-related debt. The original agreement also included an advance payment to Galactic of US$3 million as a loan, pending the closure of the transaction. The new agreement increases the advance to US$8 million.

Peter Guest, president of Galactic, said he expected the deal to close within two weeks. Galactic plans to use the cash proceeds to reduce its long-term and short-term debts.