Acadian Mining to spin off gold assets

Halifax-based Acadian Mining (ADA-T) is spinning off its gold assets into a new public company to create value for its shareholders, the company says.

The new companyAnnapolis Goldinitially would be owned by Acadian shareholders and hold all of Acadian’s gold properties.

“It gives them instant value for the company’s gold assets,” says Terry Coughlan, Acadian’s vice president. “Right now we feel we’re not getting any value for the gold assets at all so when and if all the approvals come in from the regulatory bodies and shareholders and it starts trading it’ll have instant value for shareholders.”

Under the proposed deal shareholders in Acadian would receive one share of Annapolis for every four shares they hold of Acadian.They would continue to have the same number of Acadian shares as they owned previously.

The deal has yet to be approved by Acadian shareholders, the Supreme Court of Nova Scotia or regulatory authorities but Acadian anticipates it will go through by the end of June.

Acadian has been developing four advanced gold propertiestogether known as its Scotia Goldfields projectconsisting of Beaver Dam, Tangier, Forest Hill and Goldenville.

Each of these four properties are past producers and host National Instrument 43-101 resources.

In total, the four projects have a measured and indicated resource of 626,000 oz gold and an inferred resource of 909,000 oz gold.

“They’re all past producers and are excellent quality assets,” Coughlan says. “They have underground infrastructure. They all have shafts and declines on them, either built in the 1980s or refurbished in the 1980s, and those shafts and declines are right in the middle of the resources on these properties so they are very far advanced.”

Of the four properties, Beaver Dam is the most advanced and a scoping study is underway to see if the property can support an open pit operation followed by an underground phase.

At a cut-off grade of 0.3 gram gold per tonne, Beaver Dam holds 9.08 million tonnes of measured and indicated grading 1.53 gram gold per tonne for a total of 504,000 oz gold. In addition, Beaver Dam has an inferred resource of 10.4 million tonnes grading 1.51 gram gold per tonne for 504,000 oz gold.

Beaver Dam is being considered as the site for a central milling facility that would process material from future underground operations at Forest Hill, Goldenville and Tangier. Acadian’s strategy is a multiple mine, central processing, managing and servicing strategy.

At its Tangier gold property, there is a modern ramp to 145 metres and about 5,000 metres of underground work has been completed. At a cut-off grade of 3.5 gram gold per tonne, Tangier has an indicated resource of 134,000 tonnes grading 9.67 gram gold per tonne for a total of 42,000 oz gold. It also has an inferred resource of 271,000 tonnes grading 12.08 gram gold per tonne for a total of 105,000 oz. gold.

Both the Forest Hill and Goldenville projects have modern shafts and extensive underground development. Forest Hill contains an indicated resource of 225,000 tonnes grading 14.91 gram gold per tonne for a total of 108,000 oz gold. The inferred resource is 383,000 tonnes grading 11.93 grams gold per tonne for 147,000 oz. gold

Finally, Goldenville hosts an indicated resource of 63,000 tonnes at a, grading 14.72 grams gold per tonne for 30,000 oz. gold. Its inferred 385,000 tonnes grading 12.38 gram gold per tonne for a total of 153,000 oz gold. The cut-off grade used was 3.5 grams gold per tonne.

The objective is to advance these properties to production after completing positive studies and obtaining the necessary permits and financing, the company says.

Acadian will continue to own the Scotia mine along with all of the company’s base metal claims including the Getty deposit, the Smithfield deposit currently under option, the Eastville prospect, the Lake Ainslie barite-fluorite deposits and its 44.42% interest in Royal Roads (RRO-V).

Royal Roads’ principal asset is a 32 km by 5 km property called Tulks North in central Newfoundland.

Royal Roads holds a 26.4% equity interest in Buchans River (BUV-V), which also holds a number of properties in the Buchans camp. Acadian’s indirect interest in Buchans River is 11.7%.

As for Acadian’s open-pit Scotia mine, it is forecast to produce 30,000 tonnes of zinc concentrate and 12,000 tonnes of lead concentrate a year.

The Canadian junior is also exploring and developing gold, zinc-lead and barite properties across Atlantic Canada.

Acadian is currently trading at about 64 a share and has a 52-week trading range of 52-$1.39.

The company has 142.2 million shares outstanding.