Ruling clears the way for FirstMiss spinoff

First Mississippi (NYSE) hopes to spin off its gold mining subsidiary, FirstMiss Gold (NASDAQ), some time in 1991, the company says. The resource and technology company recently received a long- awaited ruling from the Internal Revenue Service, which allows a tax-free spinoff of First Mississippi’s 82% interest in the gold miner.

“We . . . intend to proceed with the spinoff when we have achieved routine operations and we are comfortable FirstMiss can operate as a viable stand-alone company,” said J.K. Williams, chairman and chief executive officer of First Mississippi.

FirstMiss owns and operates the Getchell gold mine and mill in north-central Nevada, a 3,000-ton- per-day operation. Startup problems, including a mechanical complication at the Getchell mill, have hampered recent production. For the quarter ended Sept. 30, the mine produced 45,098 oz. of gold at an average cash production cost of US$280 per oz.

Proven and probable reserves at Getchell totalled 8.1 million tons with an average grade of 0.15 oz. per ton at the end of 1989. Refractory ore is processed by an autoclave using pressure oxidation technology.

First Mississippi recently authorized a loan of up to US$5 million to the gold mining subsidiary to meet capital requirements resulting from startup expenses and lower gold prices.