Goldteck to spend $2.7 million to explore old Stairs property

Toronto based Goldteck Mines Ltd. has filed a preliminary prospectus for an offering of flow- through and common shares to raise approximately $5.4 million for exploration on three properties, including the old Stairs mine near Matachewan, Ont.

Under the terms of the prospectus, Goldteck will issue a minimum of 400,000 and a maxium 1.2 million “Class A” flow-through units at $2.50 per unit. The company will also issue a minimum 800,000 and a maximum 1.6 million units at $1.50 per unit consisting of one common share and one “series B” share purchase warrant.

Formerly Errington Gold Exploration, Goldteck bought the Stairs property from Regal Goldfield’s Ltd. for $5 million in October l986. Located in the northwest portion of Midlothian Twp., Ont., the property consists of 124 (including 18 leased) claims.

Under the terms of the deal, Greater Temagami Mines Ltd. will supervise the company’s activities in return for 10% of Goldteck’s net profits.

The deal also involved the transfer of five million common shares of Errington to Regal which is now Goldteck’s largest shareholder.

Active management of Goldteck was assumed by Vancouver-based Teck Corp. which has the right to carry out a feasibility study on specific prospects on the property. If Teck elects to bring the “specific prospect” into production, it would be the sole owner of the prospect, with a 40% interest going to Goldteck and 10% to Greater Temagami.

However, Teck does not have an equity interest in Goldteck.

An underground development program was begun on the Stairs property in l964 and by closure in June l966, a three-compartment vertical shaft had been sunk to 700 ft with 6,226 ft of lateral work and 1,145 ft of raising on five levels.

Between l964 and l966 it produced 2,764 oz gold and 1,318 oz silver from 11,952 tons milled. Although records are insufficient to establish the existence of reserves, Goldteck is basing its projections on reserves of 80,000 tons averaging 0.38 oz gold per ton.

According to the company, the mine failed because at $35(US), the project was underfinanced and underground development and production decisions were premature.

“The economics of the operation have been changed by the current gold price plus an all weather road and a hydro power line,” President Terry Patrick told the Norther Miner.

A $2.7 million exploration program will assess the main economic zones as well as prospect the entire claim group. According to Mr Patrick, the main thrust of the program will be on the zone from Slipper Lake to the Mitt Lake Fault because this is acccessible from the existing underground workings.

Goldteck’s other properties include an option on 25 mining cliams 40 miles west of Pickle Lake in northwestern Ontario and thirteen claims west of Rickaby Twp., Ont.