Placer increases grass roots activity

Designed to increase its exposure to grass roots exploration, Placer Dome is participating in the formation of a new public company called QPX Minerals . According to Lawrie C Reinertson, senior vice-president exploration for Placer Dome, gold will be qpx ‘s principal target. In the past, the former has not fostered relationships with junior sector companies to the extent that Teck and Noranda have; but he states this is going to change. Indeed he feels his experience in this area was taken into account when he was offered his present position with Placer Dome. He previously headed up Noranda’s exploration activities in the west. Placer Dome will not be confining itself only to the grass roots plays that qpx brings to their advisory committee; and he confirms the company may on occasion even bring some properties to qpx which, of course, would fund exploration work for an interest. Each party stands to benefit from the arrangement, investors were told at a recent information meeting sponsored by the companies. In the latter’s case, it will be quaranteed a steady supply of properties for development with qpx retaining a pre- determined plan for back-in and 100% production financing. This will give qpx and its shareholders an assured carried equity position in any properties taken to production, the meeting was told. Public shareholders have put approximately $2.7 million into qpx through various private placements and the company expects to raise another $6.2 million in 1987-88 visa-a-vis a unit offering of flow-through and common shares. Approximately 80% of the offering will be flow-through and 20% straight equity which will be used as working capital. Placer Dome has a 26% interest in qpx at the moment. On a fully diluted basis after the upcoming offering qpx will have 6.9 million shares outstanding. Eleven properties are in the qpx portfolio at present, mostly in B.C., Ontario and Quebec. Since April of this year, qpx has screened approximately 62 properties and five have been selected for follow-up exploration.

Placer Dome’s participation in qpx suggests a much more aggressive approach to minerals exploration and new mine development than has been seen in the company for years. Reinertson notes that 60-70% of the company’s $20-million 1988 Canadian exploration budget will involve properties in Quebec and Ontario; and he estimates about half their global budget will be spent in Canada. Because of the recent merger, Placer Dome will manage all of Dome Mines’ former holdings in Western Canada including the qr discovery in the Quesnel area of B.C. Reinertson confirms that an in-house feasibility study has been completed for that property, emphasizing that “something is going to have to happen there in the short term.” About $6 million has been spent on the property so far, he adds.