Anvil mine boosted after Pamour deal

A complicated new ownership arrangement has partially eliminated a substantial debt-load and paved the way for development of a new open pit at the Cyprus Anvil mine in Faro, Yukon.

Under the terms of the arrangement, a 46% stake in the old lead zinc mine has been bought by Giant Resources of Australia, which has contributed around $7 million in equity funding to the operation.

Based in Sydney, Giant is an affiliate of Ariadne Australia Ltd., a company with diversified holdings in industrials, resources and financial services.

The remaining 46% is retained by Curragh Resources Inc., a new company created to own the Cyprus Anvil mine after it was bought by Curragh Resources from Dome Petroleum in late l985.

Curragh is controlled by Chairman Clifford Frame who bought the mine with a number of associates in l985. Under the new ownership arrangement, Mr Frame’s partners have been bought out and the former president of Denison Mines Ltd., is now chief executive of Pamour Inc. which owns 50.2% of Giant Resources.

Giant acquired Pamour’s Timmins, Yellowknife and N.W.T. mining operations in March l987 giving it annual gold production in excess of 200,000 oz annually.

Boliden AB, a Swedish metals company which sells lead and zinc mined from Faro, retains an 8% indirect interest in the Cyprus Anvil mine through its 15% ownership of Curragh Resources.

While the date of a public stock offering in Curragh Resources has yet to be decided, Mr Frame says any share issue will not affect the status of the company’s existing partners. Mr Frame remains chairman and chief executive of Curragh and three Pamour subsidiaries – Pamorex Minerals Inc., ERG Resources Inc., and Giant Yellowknife Mines Ltd.

Under the terms of the deal, Giant Resources’ Chairman Robert Needham will continue as chairman of Pamour. He also becomes vice-chairman of Curragh.

Before joining Giant, Mr Needham was managing director of Placer Pacific Ltd. which is Australia’s 12th largest corporation in terms of share market capitalization.

While the financial details of the Faro arrangement have not been revealed, it has reduced Anvil’s debt load of around $110 million to near $40 million.

Giant Resources has contributed around $7-million in Equity funding to finance development of Anvil’s new open pit (the Van Gorda lead-zinc property) and later the Cirque deposit in B.C. which will allow the mine to operate well into the next century. According to Mr Frame, the Van Gorda open pit deposit is scheduled to go into production in late l988.

The $7-million equity is about equal to the interest on Curragh’s share of the $65 million which the company paid Dome Petroleum in l985.

Curragh originally obtained the mine in exchange for assuming “about half” of Dome’s $130-million mine liability with the Toronto Dominion Bank. After production at the Cyprus Anvil mine resumed last July, the mine was expected to produce about 250,000 metric tons of zinc concentrate while running at an average 80 per cent capacity.