Lac Shortt royalty deal upsets Opawica meeting

The sharp differences between Opawica Explorations Inc., vendor of the Lac Shortt gold mine property of Corp. Falconbridge Copper, and that company surfaced during a lengthy annual meeting of Opawica shareholders this week.

The battle looms over the long delay in the payment of any royalties under Opawica’s retained 7 1/2% net profit interest in the mine, which is now milling at the rate of 1,250 tons daily. Claiming that Falco is in default of its agreement, Opawica will file for arbitration or go to court, President H. Grant Harper told the meeting.

Another bone of contention is the high interest charges and high administrative costs the big firm is levying. Interest charges are “way out of line,” according to Mr Harper.

Part of the delay stems from the several changes in the control of the operation, which is now in the hands of Kerr Addison.

The mine picture itself is looking “very encouraging,” Mr Harper said. But the operator has been providing very few facts, especially in connection with a brand new west zone, indications of which are that it could be larger than the main mine.

Falconbridge, apparently, is amortizing pre-production costs over a 4 1/2-year period based on the original proven ore estimate. With a ver y much longer life now indicated, Opawica is pressing for an extension of this amortization period, for more ore would hasten royalties. Amortizing over a 12-year mine life would “make quite a difference,” Mr Harper pointed out.

“We are simply not getting the facts,” Mr Harper said when pressed for more information on the new ore findings by Geologist S. N. Charteris, an Opawica shareholder and long-time former employee of Falconbridge, who played a key role in bringing Falconbridge into the picture in the first place.

The Kerr Addison company was put on notice of Opawica’s strong objections at the time that company took over control of Corp. Falconbridge Copper. It seemed more co-operative but there are still delays, the meeting was told. “Kerr talks nicer, but nothing seems to happen,” D. J. Foster who is the largest single Opawica shareholder interjected, adding that Opawica “will pursue these matters vigorously.”

“As yet there have been no serious discussions on our bones of contention,” Mr Harper admitted, adding that ” Falconbridge Copper has been ignoring letters from our lawyers.”

“Let’s go to arbitration. We couldn’t be any worse off,” quipped another shareholder, Geologist Fenton Scott.

When a call was made for the nomination of directors, five new names were added to management’s slate by Mr Charteris. While he himself was elected, the voting was heavily in favor of the old board. The following were elected directors: H. G. Harper, D. J. Foster, N. A. Straus, Gerald Iscove, H. I. Miller, R. M. Hogarth, Garry Foster and S. N. Charteris.