Belmoral selling 45% stake in Roddy to Metals Research

Belmoral Mines (TSE) has reached an agreement with U.S. company Metals Research (NASDAQ) to sell almost all of its interest in Arizona heap leach gold miner Roddy Resources (TSE). Under the agreement, Metals Research will purchase for US$500,000 about 4.6 million Roddy common shares, including 3.25 million common shares to be issued upon conversion of Roddy’s indebtedness to Belmoral.

When Belmoral agreed to sell its stake in Roddy, it held about 22% of Roddy’s 20 million issued shares plus a $4.5-million debenture that is convertible into shares at $2.04 each. Upon conversion of the debenture, Belmoral would have held 45% of Roddy.

Pending regulatory approval and the fulfilment of a number of conditions, Belmoral will retain 200,000 Roddy common shares.

In a separate agreement that is subject to the successful conclusion of the Metals Research-Belmoral deal, Metals Research will advance up to $2 million to Roddy through a secured debenture.

Proceeds of the 2-year loan will be used to retire debt and bring the company’s Big Horn heap leach mine near Wickenburg, Ariz., back into production. The interest rate on the loan is set at U.S. prime rate plus 2%.

While mining was halted at Big Horn in May, 1989, Roddy recovered 4,422 oz. gold from the existing heap leach pad before the end of that fiscal year. Funding from Metals Research should enable Roddy to repair equipment and invest in a new leach pad.