First gold pour at Nickel Plate (May 04, 1987)

The first gold bar has been poured at Mascot Gold Mines’s Nickel Plate mine near Hedley, B.C.

The Nickel Plate project was originally forecast to start in July of this year at a cost of $68.7 million. President H. G. Ewanchuk said the project came in under budget. Clearing of the site for the mining and milling operations started in April, 1986.

Mascot, controlled by Lacana Mining, is engaged in the exploration for and development of base and precious metals in Canada and the United States. It acquired the Nickel Plate property, which was an underground producing gold mine prior to 1930 and from 1934 to 1955, in 1971.

Proven and probable ore reserves at the Nickel Plate property are listed as 8.3 million tons grading 0.14 oz gold per ton recoverable by open-pit mining, and 2 million tons underground.

Lacana acquired a 51% interest in Mascot this year in a deal with Royex Gold Mining. Lacana purchased 9,959,596 shares of Mascot from Royex for $150 million ($65 million in cash, a $25-million promissory note and $60 million in preferred shares in a Lacana wholly- owned subsidiary, the preferred shares convertible into Lacana common shares at $10 each).

After the share issue, Royex’s interest in Lacana dropped to about 26%. Royex has since increased its interest in Lacana to about 44% by choosing to convert the preferred shares (of Lacana Gold Corp.) mentioned above into Lacana common shares.

Shareholders of Lacana, at a special meeting last week, approved the share conversion and the issuance of up to 6 million common shares to Royex.

In other news, Lacana has reported a net profit for 1986, before extraordinary items of $7,577,000 (63 cents per share), and a net profit, after extraordinary items of $9,556,000 (80 cents per share). The company recorded a loss in 1985, after extraordinary items of $23.9 million ($2.10 per share).

Revenues were $37.2 million in 1986 compared with $32.4 million a year earlier. The extraordinary gain in 1986 of $1.98 million (17 cents per share) is attributed to the recovery of deferred income taxes on application of prior year losses.

Lacana has also announced a dividend of 15 cents on the outstanding common shares of the company, payable June 1, to holders of record at the close of business May 15. Holders of record of deposit receipts at the close of business May 15 will also be entitled to the dividend.

Elected to the board of directors of Lacana is Ned Goodman. Also, A. P. Walsh has been appointed vice-president finance, and R. L. Sparks is now the company’s vice- president human resources.

The first gold pour has been completed at Mascot Gold Mines’ Nickel Plate project 150 miles east of Vancouver. This is the third time the mine has commenced production since 1904 but the first as a large-scale open pit operation.

Mining and milling operations are in the final stages of commissioning less than 12 months after site clearing began. The Nickel Plate project was scheduled to begin production this July at a capital cost of $68.7 million but it’s now several months ahead of schedule and under budget as well.