Toronto-based Rio Algom (TSE) has agreed to buy a 25% royalty interest in the production proceeds from the Polaris mine on Little Cornwallis Island, N.W.T.
The royalty interest is the main asset of NCO Mines, a wholly owned subsidiary of Northern Canadian Oils. Rio will buy the interest by acquiring all shares of NCO for about $57 million.
“One of the interesting parts of the agreement is that we will also hold a 25% joint-venture interest in the exploration of 80,000 acres on Little Cornwallis Island,” said Forbes West, vice-president of communications for Rio. “We think there is great exploration potential there.”
Last year, the Polaris lead-zinc mine, operated by Cominco (TSE) and partner Pine Point Mines, milled more than 1 million tonnes of ore averaging 12.3% zinc and 3.5% lead. Shipments of lead and zinc concentrates for the year were 234,000 tonnes, and reserves are expected to last another 10 years.
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