Sherritt, Agassiz end negotiations over SherrGold

Negotiations between Sherritt Gordon Mines and Agassiz Resources involving acquisition by Agassiz of the former’s shareholding (60.5% interest) in SherrGold Inc., together with certain other mining interests in Manitoba and Ontario, have been terminated.

Sherritt had contemplated the sale of its interest in SherrGold as part of a general program to reduce debt and to strengthen its over-all financial position. In late June it was announced agreement-in-principle had been reached with Agassiz and negotiations continued up to this latest decision to break off talks.

Sherritt says it plans to maintain its investment in SherrGold and to bring operating rates at the McLellan gold-silver mine, located near Lynn Lake, Man., up to capacity and continue an extensive exploration program in order to delineate additional mineable reserves.

At the McLellan mine, a third mining level was brought into production in late September. SherrGold’s exploration budget this year is about $10 million; the bulk of the funds is being spent on work at the Nisku, Rainbow and Wasekwan properties.

Earlier this year, Sherritt sold certain oil and gas properties to Royal Trust Energy Corp. Also, the Ruttan copper-zinc mine in Manitoba, together with related assets and liabilities, was sold to Hudson Bay Mining and Smelting.