Glimmer to buy Hemlo’s stake in Hislop-Beatty

After learning that Hemlo Gold Mines (TSE) intends to sell its 60% interest in the Hislop-Beatty gold joint venture, 40%-owner Glimmer Resources (VSE) announced its intention to exercise its first right of refusal and buy the interest.

Underground geological reserves at the property, situated in northeastern Ontario, are estimated at 1.4 million tons averaging 0.29 oz. per ton.

Glimmer is contemplating developing the deposit, first as an open pit and then as an underground mine accessible from ramps on the pit floor.

The open pit is expected to yield more than 40,000 oz. per year for five years, with underground operations generating an

additional 25,000 oz. per year over four years. Independent

consultants support Glimmer’s conception and have recommended a feasibility study.

If development begins immediately, the company says, the project could be operational as early as 1996. At current prices, the mine would generate an operating profit of about $10 million annually.

To purchase the interest, Glimmer will pay Hemlo $150,000 before May 24 and another $2.8 million before Sept. 30. Hemlo will

retain a sliding-scale royalty of between 2% and 6%, depending on the price of gold. Glimmer is considering various financing

alternatives, including private placements, underwritings,

debenture issues and hedging. The company fully expects to raise the $6 million required to buy the interest and develop the

deposit.