Letters to the Editor Hemlo Gold potential

In the interest of keeping shareholders, investors and your readers properly informed, there are several corrections that should be made to your Page 1 story on Hemlo Gold Mines, in the Feb 9 edition of The Northern Miner.

Your reporter got most of the information on the mine right, apparently from the prospectus. Unfortunately he didn’t contact anyone at the company or the underwriter before expressing his unfounded opinions about the stock issue and the future of the company.

An important mis-statement to get corrected is that no rights issue is planned or anticipated. As the company’s officers explained at the recent “Road Show” meetings in advance of the issue, the projected cash flows from the mine will be more than adequate to finance all planned capital expenditures and exploration. No further stock issue of any kind is contemplated at this time. In fact the president commented in an answer to a question that the company plans an early dividend payment, probably within the year.

It was also explained at these investors’ meetings that the present obligation to the bank, which stems from the original capital expenditures to bring the mine to production, will be refinanced immediately in the form of a gold loan. Many of the active major gold producers have such financings in place. Hemlo’s gold loan will be one of the largest on record, and will have a term of 8 1/2 years. The company will have more than sufficient finan cial flexibility to support its very strong potential for growth.

The Northern Miner has always been a great supporter of the mining industry especially in the prospect and exploration stage. Hemlo Gold is very proud of the fact that this is an arrangement where all the segments of the industry worked properly together and were well rewarded. The prospectors who initiated the staking and the syndicate which backed them, the junior exploration companies which financed the early high risk drilling, and the major company that developed the mine to production, all are participating in this major new corporation.

All have benefited. The extremely high quality orebody, the work force that is running it superbly, and the company that it has created will play a major role in mining in Canada for many years to come. I hope The Miner will be able to cover these future developments positively. Wilson Barbour Chief financial officer Hemlo Gold Mines Inc.