Shaft sinking on the Holloway project near Matheson, Ont., expected to begin in May, has been delayed by negotiations to create a single mine property, says Joseph Baylis, a spokesman for Hemlo Gold Mines (TSE).
He said the four parties involved in the negotiations, Hemlo, Freewest Resources (TSE), Teddy Bear Valley Mines (CDN) and Newmont Mining (NYSE) are “close” to a deal but are still arguing over a few percentage points. Working with Freewest on the Holloway property and with Freewest, Newmont and Teddy Bear on the adjoining Teddy Bear property, Hemlo has a 55% interest in the project overall.
Property ownership is further complicated by an illegal reorganization of Teddy Bear in 1984 that robbed the 65-year-old Teddy Bear Valley Syndicate of its controlling interest in the company. Teddy Bear is attempting to reverse that reorganization through the courts. A plan of arrangement has been filed and initial proceedings will begin on July 3, said a spokesman for the company.
As soon as a unification deal is signed, Hemlo will proceed with a $12-million underground exploration program and reserve validation program. Baylis said the company has selected a list of bidders for the contract work, which will include sinking an exploration shaft to 430 metres, 1,000 metres of drifting and 25,000 metres of underground drilling.
The Holloway project’s Lightning zone contains preliminary reserves of 5.5 million tons grading 0.27 oz. gold per ton and remains open at depth.
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