Taseko earmarks $8.5 million for Fish Lake work

Private placement financing totalling $7.1 million has been arranged by Taseko Mines (VSE), allowing the company to proceed with an $8.5-million exploration, engineering, feasibility and permitting program at the Fish Lake copper-gold project near Williams Lake, B.C.

The placement includes 335,000 units at $10 each plus 379,400 flow-through units at $10 each for total proceeds of $7.1 million.

The units include a share plus a 4-month share purchase warrant exercisable at $10. If all the warrants are exercised, the company will have raised an aggregate of $14.3 million.

Taseko has agreed to qualify the new issue for resale by way of a prospectus. The company plans to use the funds for additional drilling on the Fish Lake deposit in order to determine its full extent. Drilling in 1991 outlined an estimated preliminary reserve of 600 million tons grading 0.32% copper and 0.016 oz. gold per ton.

The company expects to have three rigs operating on the property shortly, drilling the deposit off on 330 centres.

The first phase of the program will be followed up with delineation and infill drilling as well as pilot plant metallurgical work and environmental permitting.

Results from this work will form the basis for a bankable feasibility study on the Fish Lake project.

Taseko renegotiated its original property agreement with Cominco (TSE) in early 1991. Cominco originally had the right to earn an 80% interest in the property by bringing it into production, but had placed the project on hold while it waited for higher metal prices.

Taseko’s new agreement gives the company management of the project until May 31, 1995 (extended from May 31, 1994), while it proceeds with further development and attempts to find a buyer.

Under a scaled formula, Cominco will receive 40% of the proceeds to a maximum of $48 million if the property sells for more than $70 million. In the event no buyer is found by the deadline, Taseko reverts to a 20% net profits interest and Cominco regains management of the property. The company expects the bankable study to be completed by March, 1993.