Geddes raising $10 million for Windy Craggy copper bet

After spending about $28.5 million since 1981, Geddes has succeeded in outlining one of the largest undeveloped copper deposits in Canada. Mineable reserves at Windy Craggy stand at 111.5 million tonnes of grade 1.7% copper (plus precious metal, cobalt and zinc).

Because the property is set in rough mountainous terrain near the Alaskan border, Chairman Geddes Webster reckons that Geddes and affiliate Northgate Exploration (TSE) will have to raise in the order of $150 million to bring the project into production.

The feasibility of a 15,000- to 25,000-ton-per-day operation is currently under consideration.

“We will be going to the market for a lot of money, there is no question about that,” Webster told The Northern Miner.

Under the terms of a rights offering underwritten by First Marathon Securities, each Geddes shareholder is being issued one right for each share held.

For every six rights, shareholders are entitled to subscribe for one unit comprising one common share and one warrant. Shareholders who fully subscribe for their units can subscribe for additional units if any are available as a result of unexercised rights.

In addition, warrant holders will be entitled to purchase one additional common share for every two warrants held for a period of three years.

First Marathon has agreed to subscribe for up to two million units and arrange a private placement for $2.7 million in flow-through shares.

While it won’t exercise its initial rights under the offering, Northgate Exploration will subscribe for a private placement of units worth $3 million comprising shares and warrants prior to the rights offering.

As reported (N.M., May 15/89), Northgate recently increased its stake in Geddes to 31% from 27% through a private placement.

Proceeds of the offering are to be spent on work needed to complete the pre-feasibility study. According to Webster, that would include surface and underground drilling, metallurgical and plant studies. A staff of about 60 employees have also been doing survey work for a 65-mile all-weather road needed to connect the potential mine site to the highway to the Alaskan port of Haines.

“We are getting down to doing economic rather than just geological studies and everything is shaping up as we expected,” said Webster. “It is really quite exciting.”

A subsidiary of Falconbridge Ltd. (TSE) retains a 22.5% net proceeds interest in the project.

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