Gutnick eyes St Andrew

First it was Canadian diamonds that caught the eye of Joseph Gutnick. Now, assuming all goes as planned, the Australian mining magnate is poised to become chairman of St Andrew Goldfields (SAS-T), a junior company which holds a modern gold mill and three known gold systems near Timmins, Ont.

The proposed transaction would result in St Andrew’s being held 36% by Baynet, a Nasdaq-listed company involved in the development of a business-to-business mining portal. Baynet, in turn, is held 79.2% by Edensor, a trustee for the Joseph Gutnick family trust.

St Andrew has focused its efforts on restarting the Stock mill and carrying out a feasibility study for the Taylor mine gold project, 8 miles from the Stock mill. The company also holds a large land package covering 20 miles of the Porcupine-Destor fault, east of Timmins.

The junior has retained Griffiths McBurney as its financial advisor in the proposed transaction with Baynet, which is to be accomplished by way of a share exchange and private placement.

A $4-million debenture financing (convertible into share units priced at 25 each) is also planned. Assuming full subscription of the private placement and debenture financing (combined with other aspects of the transaction), St Andrew is expected to generate gross proceeds of about $22 million.

These funds will be used to improve working capital, replace existing debt facilities and finance the first phase of underground exploration and development at the Taylor project. The balance would be used to finance the project into production.

At last report, the Taylor property hosted total resources of 3.5 million tons grading 0.3 oz. gold per ton, based on a cutoff grade of 0.075 oz. If the cutoff grade is raised to 0.1 oz., the estimated resource becomes 3.1 million tons at an average uncut grade of 0.32 oz. gold.