St. Genevieve nets $15 million in Louvem deal

St. Genevieve Resources (TSE) is currently considering its options after recently agreeing in principle to sell 4.35 million common shares of Societe Miniere Louvem (TSE)to Noranda (TSE) for $28.3 million or $6.50 per share.

Louvem’s main asset is its 45% stake in the Louvicourt Twp. massive sulphide discovery east of Val d’Or, Que., where partner Aur Resources (TSE) has outlined a deposit containing 30 million tons of 4.3% copper and 2.1% zinc per ton.

Pending regulatory approval, Chairman Pierre Gauthier said St. Genevieve will realize a profit of $15 million on the transaction assuming it closes as scheduled June 12.

St. Genevieve’s interest in Louvem will also drop to 21% from 45% (3.8 million shares) while Noranda’s increases proportionately to 52.1% (5.1 million shares) from 28.2%.

After Noranda has purchased the shares, Louvem will transfer all of its mining assets, except the Louvicourt and nearby Manitou gold tailings projects to Monique Explorations (ME), in exchange for eight million Monique shares at 25 cents each. Louvem shareholders will then receive all of the Monique shares held by Louvem by way of a dividend.

As St. Genevieve has agreed to purchase all of Noranda’s Monique shares, it will end up with 70% of Monique which in turn is being granted a 5-year option to purchase the Manitou property and mill for $2 million.

In a recent interview with The Northern Miner, Gauthier says the Noranda deal enables him to balance the books and take another look at a Utah tar sands joint venture with Gold Spinners which contains 20 million barrels of bitumen. St. Genevieve’s financial obligations include a $15-million loan from Noranda, payable at 6.5% annually and $13 million of 55/8% Swiss Bonds convertible into common shares at $2.27. As Louvem’s shares traded recently at $5, St. Genevieve’s stake in the company is worth $18.9 million.

Gauthier was scheduled to give full details of his future plans at St. Genevieve’s June 13 annual meeting in Montreal.