Laminco and Aur Resources complete $250,000 private placement — Consolidated Abitibi and Laminco to amalgamate

A proposed transaction among Aur Resources (AUR-t), Laminco Resources (LMR-T) and Consolidated Abitibi Resources (CAG-M) will create a new company with more than $3 million in working capital and significant property interests in Mexico and Canada.

Toronto-based Aur has privately acquired 1.25 million shares of Reno, Nev.-based Laminco at 20cents per share. That deal is related to the proposed amalgamation of Laminco and Toronto-based Consolidated Abitibi (which is 27%-held by Aur). Each Laminco shareholder will receive one share of the amalgamated company for every 3.5 Laminco shares held, while each Abitibi shareholder will receive one share of the amalgamated company for every two Abitibi shares.

The proposed amalgamation will also involve the following transactions: * Laminco will have the right to require Aur to purchase, and Aur will have the right to purchase, before Oct. 1, 1998, 1.25 million Laminco treasury shares at 20cents each.

* Upon the amalgamation, Aur will subscribe for 2.14 million shares of the amalgamated company at 70cents each.

* Aur will immediately subscribe for 1.43 million flow-through Abitibi shares at 35cents each and, upon the amalgamation, for 714,286 shares of the amalgamated company at 70cents each.

* Aur will, upon the amalgamation, acquire the 30% interest that Abitibi is currently earning in 46 of Aur’s properties in Manitoba and Saskatchewan in consideration for the issuance to Aur, by the amalgamated company, of 1.07 million shares.

* The amalgamated company will grant Aur a back-in right to acquire a 50% interest in some properties of the amalgamated company (excluding Abitibi’s Manitoba and Saskatchewan properties and Laminco’s Luz del Cobre property) by arranging the financing to place any such property into production.

The new company will begin life with about 23.3 million shares outstanding, roughly 40% of which will be held by former Laminco shareholders, 27% by former Abitibi shareholders (excluding Aur), and about 33% by Aur.

Abitibi President James Gill will become the chairman of the amalgamated company, whereas Laminco President Ed Morrow will become president. The executive offices will be located in Reno, Nev.

Laminco owns the 39,000-ha, San Antonio copper-gold property in Mexico’s Sonora District and an early-stage, 20,250-ha gold property in Mexico’s Durango state.

The San Antonio property includes the Luz del Cobre copper deposit, which has reserves of 10.2 million tonnes grading 0.875% copper. A feasibility study carried out on Luz del Cobre envisions the construction of an open-pit, heap-leach mine capable of producing 17 million lbs. of cathode copper annually over a 10-year mine life at a operating cost of approximately US$50cents per lb. copper.

Laminco says that discussions with Ridgewood Power relating to the proposed financing of the US$22-million project have been terminated, though Laminco is still negotiating with other parties.

The remainder of the San Antonio property, excluding the areas with known gold resources, is under option to Placer Dome (PDG-T).

Consolidated Abitibi owns a 100% interest in the Abitibi and Bevcon properties in Quebec, a 50% interest in the Dumont property in Quebec, as well as the right to earn 30% of Aur’s interest in 46 mineral properties in Manitoba and Saskatchewan.