NEWS ROUNDUP (October 07, 1991)

Newmont Mining (NYSE), North America’s largest gold producer, continued to reduce its debt load recently by completing the redemption of its 7% exchangeable debentures.

Due Aug. 15, 2001, the debentures represented US$77.6 million at the end of the second quarter and were exchangeable into shares of E.I. DuPont at the rate of 164.1587 shares for each US$5,000 principal amount.

Exchanges made before and in response to the redemption notice issued Aug. 27 resulted in a pretax earnings gain of about US$36 million in the third quarter, according to Newmont.

By redeeming the debentures, Newmont reduced its second-quarter debt by 20% to US$313 million on a pro forma basis. Of that amount US$303 million is in a low-interest-rate gold loan.

Toronto-based Goldpost Resources (TSE) has temporarily suspended mining operations at the Hislop East gold mine in northern Ontario until gold prices improve.

Under a joint venture agreement with St Andrew Goldfields (TSE), Goldpost has received 50% of the $899,834 in net profits generated by the mine which produced 11,743 oz. since operations commenced in December, 1990. During that time, 61,914 tons of ore was treated.

Goldpost said it suspended mining because it wants to avoid operating on a marginally profitable basis and to preserve established ore reserves in anticipation of a more favorable gold price.

The sale of 5.3 million Cameco (TSE) warrants, priced at $14.75 each, was completed recently by Saskatchewan Mining Development Corp. (SMDC), a unit of the Saskatchewan government.

Each special warrant, subject to certain terms and conditions but without further payment, entitles the holder to receive one common share of Cameco held by SMDC and one-half of a common share purchase warrant to acquire additional common shares of the uranium miner. Each full common share purchase warrant, subject to certain terms and conditions, entitles the holder to acquire from SMDC one common share of Cameco at an exercise price of $14.75 until Oct. 1, 1994.

Pending regulatory approval of the transaction, but not before the warrants are exercised, the province of Saskatchewan will own 38.9% of Cameco’s 51.9 million shares.

The first major mill run of development ore from the SB property near Stewart, B.C., produced 6,154 oz. gold for 50-50 partners, Westmin Resources (TSE) and Tenajon Resources (VSE).

A total of 25,423 tons was milled in late August at a daily throughput of 2,311 tons. The head grade was 0.26 oz. gold, and mill recovery was 92.5%. So far, a total of 8,179 oz. gold has been produced from 33,010 tons of development ore. The first batch of production ore, some 20,000 tons, was milled in late September and initial reports are described by Tenajon as “positive.”

Mining is also reported to be progressing well, with the next mill run scheduled for mid-October. The partners expect to mine and mill 100,000 tons of reserves from the SB property before the end of this year.

With a 20-hole drill program now under way at the AOK property, Takla Star Resources (VSE) has extended the expiry date on its warrants to Oct. 31, 1991, from Sept. 30.

The extension will allow holders of the non-transferable warrants to assess assay results from the drilling program.

Four holes have been completed on the property to date and assay results are pending. The AOK property is about 14 km southwest of Placer Dome’s Mt. Milligan copper-gold deposit in central British Columbia.

The drilling program is testing a number of geophysical targets flanked by gold anomalies in a search for porphyry copper-gold deposits. Takla will net over $950,000 if the 50-cent warrants are exercised, bringing total shares outstanding to 5.7 million from about 3.8 million.

Assay results were released by Redfern Resources (TSE) for two additional holes drilled on the Tulsequah Chief massive sulphide deposit in northwestern British Columbia.

Hole 91-34 intersected 24.9 ft. grading 0.67% copper, 1.46% lead, 9.25% zinc, plus 0.058 oz. gold and 2.13 oz. silver per ton in the H lens. Hole 91-35 returned two intersections: 17.5 ft. of 1.56% copper, 2.29% lead, 13.30% zinc, 0.080 oz. gold and 3.72 oz. silver from the H lens; and 28.7 ft. of 3.50% copper, 0.94% lead, 7.71% zinc, 0.059 oz. gold and 6.66 oz. silver from the AB lens.

Redfern is continuing work on the project on its own after former partner and operator Cominco (TSE) opted out of the project earlier this year. The junior has been involved in discussions with other parties interested in a possible joint venture of the Tulsequah Chief project.

A drill rig is being mobilized to the Rob 15 and 16 claims in northwestern British Columbia to test a strong geophysical target on the Boulder Creek zone.

Tymar Resources (VSE) and Consolidated Goldwest Resources (VSE) can earn a 50% interest in the property from Teryl Resources (VSE) by spending a total of $1 million by Oct. 31, 1992. The two companies can earn an additional 10% interest by bringing the property into production.

The Boulder Creek zone is identified by a 1,400-metre long, north-south trending structure lying adjacent to the boundary between the Rob 15 and 16 claims and the Phiz property owned by Adrian Resources, Crest Resources and Magenta Development.

Soil sampling has detected geochemically elevated values for gold, silver, copper, lead and zinc. An initial program of two holes is planned to test the target.

After completing due diligence work on Canamax Resources’ (TSE) Bell Creek gold mine and mill near Timmins, Ont., Falconbridge Gold (TSE) has called off its plan to acquire the operation under terms outlined in August.

Brian Ferguson, chairman of Falconbridge Gold, said the decision not to proceed was based partly on due diligence and partly on economic factors including the recent decline in the price of gold.

While the two companies are still negotiating, he said he couldn’t predict whether a new agreement can be reached.

In mid-August, Falconbridge Gold signed a letter of intent to purchase the 25,000-oz.-per-year mine and mill for $5 million. Falconbridge Gold said it was also negotiating to acquire two former gold mines and a basket of exploration properties by purchasing Amax’s (NYSE) 42% stake in Canamax via a put-call agreement involving 10.4 million common shares.

Canamax planned to use proceeds of the proposed deal to pay off $14.7 million in bank debt while continuing to operate as an exploration company.

A fall drill program is being planned by Minnova (TSE) to further test the newly discovered Fleetwood massive sulphide zone on the Seneca property 100 km east of Vancouver, B.C.

The program will start in early November, and will consist of 3,280 ft. of drilling to test extensions of the Fleetwood zone which is open to the northwest, southeast and south.

Minnova can earn a 51% interest in the project from International Curator Resources (VSE) by spending $1.6 million on exploration and by making cash payments of $300,000 by 1996. A further 9% can be earned by spending an additional $500,000 by 1998.

Subject to certain approvals and conditions, Camreco (TSE) will merge with Environmental Technologies Invest-ments (ETI), a CDN unlisted company.

The amalgamated company will be named Environmental Technologies International and will trade on The Toronto Stock Exchange. ETI shareholders will receive 95% of its shares on a 1-for-1 basis while Camreco shareholders will be entitled to 5% of the amalgamated share capital on a 20-for-1 basis. Camreco’s gold assets, which include a former producer near Sioux Lookout, Ont., will be distributed to Camreco’s current shareholders. The junior resource company is also negotiating the sale of its oil and gas assets. ETI’s goal is to acquire and manage a number of semi-autonomous companies operating in the field of en-vironmental technology and pollution control. ETI recently traded at 85 cents while Camreco is valued at less than 10 cents.

Toronto-based Horsham (TSE), the company that controls American Barrick Resources (TSE), is planning to participate in the construction of a business park in Germany.

The company recently purchased a 195-hectare property in Brandenburg for DM20 million ($13.1 million) with the expectation of building the project in conjunction with a number of German financial partners.

Horsham said it acquired the park from the Treuhand, the state agency responsible for privatizing assets within the former East Germany. According to Treuhand estimates, about DM1.5 billion ($900 million) has been spent by users and owners in the business park during the past 15 years and 15,000 jobs could be created in future.

Bond International Gold, now a unit of Toronto-based LAC Minerals (TSE), has agreed to buy from one Swiss holder 64 million Swiss francs principal amount of its 4% gold equivalent bonds issued in November, 1988, and due Nov. 22, 1995.

LAC says Bond will make a follow-up offer to all remaining holders of the Swiss franc debt at the same price, 84% of par, plus accrued interest. The follow-up offer will be valid until Oct. 10.

According to LAC, there are 92,035,000 Swiss franc bonds outstanding, including the bonds the company has already agreed to buy. If all bonds are tendered, the total cost at current exchange rates will be about US$53 million, which will be paid from cash on hand.