McWatters exits Kiena, shares suspended (May 14, 2004)

McWatters exits Kiena, shares McWatters Mining (MWA-T) has agreed to sell the balance of its Kiena mine royalties to Wesdome Gold Mines (WDG-V) for $2.2 million, including the assumption of some $700,000 in debt.

Wesdome acquired the Kiena complex in Val d’Or, Que. in early January for $3 million. The deal saw McWatters retain a 4% net smelter return royalty on existing resources and a 2% royalty on any new resources found on the property. In early April, McWatters agreed to convert those royalties into a 2.5% royalty on all resources to be processed from the Kiena.

In exchange, Wesdome forked over $700,000 in cash and agreed to pay McWatters $1.50 per tonne to process up to 5 million tonnes of ore from any source at Kiena’s mill, with the rate falling to $1 per tonne thereafter. The rate under the new deal is $1 per tonne.

McWatters also recently agreed to sell its Sigma-Lamaque gold mine complex in the Val d’Or to Century Mining (CMM-V) for $25.9 million in a bid to emerge from bankruptcy protection.

More recently, McWatters said that Toronto Stock Exchange is reviewing the company on an expediting basis with respect to meeting the requirements for continued listing. Late on Friday, TSX suspended the company’s common shares and gold-linked convertible unsecured debentures for failure to meet those requirements.