Dundee-Palliser gets government loan to purchase Gays River

The government of Nova Scotia will lend Dundee-Palliser (TSE) $6 million to help it buy the Gays River zinc-lead mine from Westminer Canada.

The loan is subject to satisfactory zinc and lead prices and additional funding of $3 million.

The option agreement with Westminer was recently extended until Oct. 31, 1994, provided Westminer does not give notice to Dundee-Palliser (95 days prior to either April 30 or July 31, 1994) that the option will be terminated. Dundee-Palliser needs an estimated $15.5 million to buy the mine and bring it back into production. The company has so far arranged $12.5 million in financing, including the government loan.

The mine, which has minable reserves of 1.4 million tonnes grading 9.81% zinc and 5.28% lead, is currently shut down. Dundee-Palliser has agreed to pay Westminer the estimated costs of maintaining the mine during the extended option period.