St. Genevieve’s stake in Louvem may be key to settlement with Aur

Just eight weeks before litigation involving the Louvicourt Twp. massive sulphide discovery is scheduled to be heard in court, partners Aur Resources (TSE) and Societe Miniere Louvem (TSE) are attempting to resolve their differences. The two companies are fighting for control of a Val d’Or, Que., deposit with potential massive sulphide reserves containing 36 million tons of grade 3.11% copper and 1.34% zinc.

“Both sides have realized that a court case could be expensive and we had better give it one last shot,” said Louvem Chairman Pierre Gauthier who has met with Aur President James Gill during the pre- trial phase of the legal proceedings.

Gill was unavailable for comment and Gauthier wasn’t prepared to say what exactly has been discussed in the Montreal offices of their respective law firms.

But sources close to the situation say Gauthier is attempting to find someone willing to bid for the 8.7 million Louvem shares held by St. Genevieve Resources (TSE).

Speculation is based on recent increases in the price of both St. Genevieve and Louvem. They have risen to $1.52 and $6.25 in the past couple of weeks while Aur shares are trading at $4.40.

Noranda Minerals, a unit of Noranda (TSE), obtained a 3-year option last August to purchase 5% of Louvem’s 16.592 million shares outstanding from St. Genevieve for between $10 and $8.10 per share.

Having already bought 3.2 million shares (21.6% interest) for an average $6.60 per share, Noranda also has the right of first refusal on Louvem shares held by St. Genevieve and the management of Louvem and St. Genevieve.

As Noranda considers the $10 asking price too high, Louvem may be facing a creeping takeover unless Gauthier can find a bidder for the St. Genevieve block, according to a source who preferred to remain anonymous. “We are simply negotiating at the moment,” said Gauthier when asked about the discussions with Aur. “If and when there is a deal, we will announce it,” he said.

However, even if the two sides do not resolve their differences, the trial may be postponed until mid- November because of procedural delays, said Aur Secretary Peter McCarter. It was originally scheduled for Sept. 18.