Monk sells Sol Wood interest to Sikaman

Alberta-listed Monk Gold & Resources has sold to Sikaman Gold Resources (TSE) its 7.5% interest in the Sol Wood placer mine in Sierra Cty., Calif.

In return, Monk will receive a $193,000 convertible debenture from Sikaman, subject to regulatory approval.

The debenture, to be repayable two years after it is issued, will bear interest at 7.5% per annum. The principal and interest owing pursuant to the debenture can be converted into units of Sikaman, each unit consisting of one share and half a share purchase warrant. Conversion price: 43 cents per unit. Each whole warrant would entitle Monk to buy additional shares at 45 cents each over two years.

Sikaman can have the conversion brought about if the trading price of its shares exceeds 65 cents over 20 trading days.

Proceeds from the debenture would go toward increasing Sikaman’s ownership in Sol Wood to 100%. This would be achieved by buying a 32.5% equity interest from Sikaman’s current partner and a private investor group, for a total consideration of $593,000.

Sikaman no longer intends to sell an additional 30% of the mine. (Monk had the right to earn a 37.5% interest in Sol Wood but to date has earned only 7.5%)

A series of underground cave-ins has delayed development work at Sol Wood. As a result, Sikaman intends to gain access to the underground deposit through a 200-300-ft. decline.

“The Sol Wood mine remains an important asset for the company,” said Sikaman President A.T. Griffis, “and should provide a solid cash flow following the implementation of our new mine plan.”

In other news, Sikaman has completed two separate financings totaling just over $1 million. These include the exercise of warrants representing 3.7 million shares at 20 cents per share and a private placement of 952,380 shares at 31 cents per share.

The company is also proposing two additional private placements totaling $600,000, subject to approval by the Toronto Stock Exchange. This total includes an additional purchase of Sikaman shares by Griffis for up to $300,000.

The president said these financings will enable Sikaman to develop its two gold mining projects in Argentina — Cerro Mayal and Neuquen River. (See separate story, Page 16.)