U.S. REPORT N.A. Metals deals with Homestake

A US$12-million forward sale of gold to Homestake Mining (NYSE) has been arranged by North American Metals (VSE). The transaction, which will involve about 39,000 oz., is on terms similar to a $31-million forward sale between the two companies in July, 1989. Homestake is North American’s controlling shareholder.

North American says proceeds from the sale will be used to repay a short-term bridge loan and to fund operating cash shortfalls resulting from startup problems at the Golden Bear mine in British Columbia.

Production at the mine was recently reduced by 50% because of equipment problems. President Jack Thompson reports that repairs to the roaster will take about three months. Planned is the replacement of the steel alloy plate that buckled in the roaster with a refractory brick arch.