Atna cries foul over proposed Yukon deal

BBy Michael Attenborough

In a deal that could affect the development of the Wolverine massive sulphide deposit in the Yukon, Boliden (BOL-T) subsidiary Boliden Westmin has signed an agreement to deal its 60% interest in the project to Expatriate Resources (EXR-V).

The move has come under fire from joint-venture partner Atna Resources (ATN-T), which claims possession of a right of first refusal on the disposition of Boliden Westmin’s interest.

“We were aware that something like this might happen,” says Peter DeLancey, Atna’s president. A release from Atna, which owns a 40% interest in the base metal project and is operator, states that the company will take “all necessary and appropriate steps to ensure that Boliden complies with” the original joint-venture agreement.

According to DeLancey, Atna and Boliden Westmin agreed that the project would be more attractive to a major if one of the companies owned the deposit outright. “We would like to own 100% of the deposit,” states DeLancey, adding that a full interest for either company “would best advance the project.”

However, James Borland, vice-president of investor relations for Boliden, says that the structure of the deal would render Atna’s right of first refusal void. The first part of the 2-tiered agreement involves the transfer of patented hydrometallurgical technology to Expatriate in return for 1.7 million treasury shares. Boliden already owns 1.4 million Expatriate shares; the addition of the new shares would give it a 30% interest in the company and associated company status. Atna’s right of first refusal is not covered by a deal struck between Boliden and an associated company, Borland says, adding, “Atna is aware of that.”

The second part of the deal involves Boliden’s Finlayson Lake assets, which include its 60% interest in the Wolverine deposit, as well as 676 claims and its interest in the TY joint venture, which Boliden shares with Pacific Bay Minerals (PBM-V). In return for relinquishing its direct interests, Boliden will receive 5 million treasury-issued Expatriate shares, bringing its interest in the company to 53.5% (8.15 million of Expatriate’s 15.2 million shares).

Borland says that Boliden simply wants what is best for the development of Wolverine, which has a high selenium content that may adversely affect the marketing of its zinc, copper and lead concentrates. He points out that the appointment of Harlan Meade as president of Expatriate is important to the deal. Meade, who headed up Westmin Resources before it was acquired by Boliden, is familiar with both the Wolverine deposit and the patented hydrometallurgical process Boliden and Expatriate are evaluating to overcome the deposit’s high selenium content.

He adds that it is not in Boliden’s best interest to focus on a single property when a junior company could easily handle the task. According to Borland, the deal, which will require regulatory and shareholder approval, is “the best thing to advance the project. It will get the attention it deserves from Expatriate.”

For the time being, however, Atna will continue with its prefeasibility study and metallurgical work at the Wolverine deposit. Resources there stand at 6.2 million tonnes grading 12.7% zinc, 1.3% copper and 1.5% lead, as well as 371 grams silver and 1.76 grams gold per tonne.