Ontex looks for new partner after Placer drops out of deal

Vancouver-based Placer Dome (TSE) has dropped out of a plan to earn a 60% stake in the Brookbank gold property from Ontex Resources (ASE), almost nine months after signing a letter of intent.

Ontex Vice-President Ross McGroarty said he was surprised by Placer Dome’s decision which was announced in a one-line statement without any accompanying explanation.

McGroarty said the decision may have been due to a couple of business points (not related to the reserve potential on the property), but he refused to elaborate when reached by The Northern Miner.

The Brookbank property was returned to Ontex in 1990 after an Ontario court ruled that Metalore Resources (TSE) withheld drill results relating to a key block of 18 claims hosting 1.4 million tons grading 0.26 oz. gold per ton. Before the trial, Placer Dome was earning a 50% interest in the property from Metalore. While Ed Kimura, Placer Dome’s manager of Canadian exploration, declined for comment, the Vancouver company appears to be awaiting the result of an appeal launched by Metalore before committing any more money toward the Beardmore, Ont., property and 471 claims nearby.

The appeal, filed shortly after the original ruling, says among other things, that the trial judge erred in returning the property to Ontex without granting Metalore reasonable compensation for its exploration efforts. Clearly disappointed by Placer Dome’s decision, McGroarty said Ontex will now begin discussions with two other majors that have shown interest in the property. He doesn’t expect the appeal to be heard in court until year-end at the earliest. Meanwhile, Ontex shares have dropped to around 69 cents from a 52-week high of $2.95.