Eastmaque takes on partner for American Girl mine

Eastmaque’s new partner is Morrison Knudsen Corp. (NYSE), an international engineering, mining and construction firm. The company has 40 years experience in contract mining which includes recent work on the American Girl project.

The two companies formed an equal joint venture to own, operate and develop the American Girl gold mine which currently produces about 2,000 oz gold per month.

Eastmaque will contribute all of the American Girl assets to the joint venture, while Morrison Knudsen will contribute $10 million(US). As part of the transaction the joint venture will assume $4.5 million of Eastmaque debt and Morrison Knudsen will assume $3 million of Eastmaque debt.

Morrison Knudsen also agreed to buy 500,000 common shares of Eastmaque for $2.5 million at $5.00 per share on a private placement basis.

According to Eastmaque director Andrew Milligan, the private placement will not appreciably dilute the 14.71% interest in Eastmaque held by VenturesTrident Limited Partnership.

Milligan said the transactions with Morrison Knudsen were not motivated to thwart further acquisitions by VenturesTrident, but rather to ensure financing for expansion projects at American Girl.

Funds will be used to develop underground and surface mines that will supplement production from the current heap leach operation and to construct a new 500- ton-per-day mill.

Eastmaque expects to increase monthly production at American Girl to an estimated 3,500 oz by September of this year, and to an estimated 6,000 oz when the mine is in full production in May of 1990.

The recent transactions will also leave the company debt free and in a strong cash position that will enable it to pursue a “vigorous acquisition policy.”

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