Amalgamation may lead to 100,000 oz per year

The proposed amalgamation of Esperanza Explorations and Black Swan Gold Mines could result in 100,000 oz of gold production for the two companies by late 1988.

According to Esperanza President John S. Brock, Black Swan initiated the merger proposal which is subject to an engineering evaluation of each company’s assets plus shareholder and regulatory approval of a proposed share exchange ratio.

Mr Brock admits the fit is a good one, citing Esperanza’s expertise on the exploration front and Black Swan’s abilities as a mine operator. Arthur Fisher, the latter’s president, was formerly vice-president operations for Total Erickson which operates two small gold mines in Western Canada.

Black Swan has been developing a number of gold properties in Australia, one of which, the Gabanintha, is scheduled to begin production this August at over 40,000 oz per year. The company has a 25% interest in the project or a net 10,000 oz of gold production. Additional production potential exists there which will be addressed with a $600,000 exploration program this year.

Exploration is currently under way at the company’s gold property in Queensland which could produce 60,000 oz by late 1988. Black Swan is the majority interest holder in the project with 60%

Esperanza’s principal asset is its gold property near Burton, B.C., which could see production sometime in 1988 at 60,000 oz per year. The company has a 100% interest in the project. Surface drilling and underground development are currently under way and the program is fully funded for the 1987 season. Mr Brock tells The Northern Miner they have encountered the zone at depth with nine out of 10 recent drill holes hitting the zone.

Black Swan has 4.5 million shares outstanding and Esperanza 8.3 million, both of which are fully diluted. Esperanza recently concluded a $1.2-million flow-through agreement at $5 per share which must be spent by Jan 31, 1988. The company currently has a working capital of over $1 million.