Getty gold exploration has $4-million backing

Getty Resources has filed a preliminary prospectus for a public offering of common shares and purchase warrants. The company’s president and chief executive officer, Richard C. Atkinson, claims it’s essentially a “re- writing” of an earlier prospectus (N.M., June 9/86), filed by GRL Acquisition, which has since been amalgamated with Getty.

Investors greeted the earlier prospectus cautiously, putting heavy pressure on the company to secure adequate funding, so a bridge financing agreement had to be worked out with S. G. Warburg & Co. of London, England.

This provided $14 million to complete the purchase of some major assets held by Getty under a previous purchase deadline.

Mr Atkinson says that Warburg will sell part of its original equity purchase in a secondary offering, although it will still remain a “significant minority shareholder.”

There will also be a primary offering of new shares and that will be firmly underwritten by Wood Gundy and First Marathon Securities of Toronto, along with Warburg.

A $4-million flow-through offering has also been completed by Getty which will be used to explore the company’s gold properties.

Getty has interests in 40 mineral prospects including the Tisdale project near Timmins where an underground bulk sampling program was recently completed on the 4th level.

Negotiations are under way to custom mill some of its surface stockpile at a mill in the Timmins area, Mr Atkinson adds.

The exploration focus has now shifted from the 4th to the upper levels and a portion of the underground workings will be allowed to flood now that they are working at a higher elevation.

Access to the mine workings at present is from an exploration shaft but the upper reaches of the mine will be accessed from an old production shaft.

Existing mine reserves (528,000 tons at 0.25 oz gold), occur in remnants of old workings, contiguous to them, below the workings and also in new areas.

A feasibility study could get under way in the fourth quarter and production at 200 tons per day might be feasible in 1987, he says. Drill patterns will have to be tightened up and ramp access might have to be installed as a prerequisite to production.

Getty has over 40 mineral properties in inventory, many of which had lain dormant because of corporate policies of its previous owner, Texaco Inc. Texaco was reluctant to spend money on the properties unless they could have been diluted.

Mr Atkinson says that Getty will have a working capital of approximately $10 million “when all the dust settles,” noting that the company’s present position is $3.7 million, with no long-term debt.

Getty is gearing up for a program on its Tundra property with Noranda Exploration. Budget discussions are under way and work should begin this fall.

The property is located 130 miles northeast of Yellowknife, in the Courageous Lake volcanic belt.