Deak begins mining operations at Astoria

Production has started at the Astoria gold mine near Rouyn-Noranda, Que., reports operator Deak Resources (TSE).

Mining of 12,000 tons per month will be carried out by Val d’Or, Que.-based contractor Ross Finlay. Ore will be trucked to Deak’s mill in Virginiatown, Ont.

Deak acquired the property from Yorbeau Resources (ME) in November, 1992, by agreeing to put it into production. Under the agreement, Deak issued Yorbeau a warrant to buy 500,000 Deak shares exercisable at 60 cents each at any time within two years, as well as a $200,000 promissory note payable over 50 months.

Astoria has proven, proba-ble and possible reserves of 1.18 million tons grading 0.2 oz. gold per ton.

Yorbeau will retain a 40% net profits interest (NPI) in the property until it has received $3 million. It will then receive a 2% net smelter return (NSR) royalty with a minimum annual payment of $200,000 for five years. Yorbeau may convert its NPI or NSR into a 40% working interest any time between Dec. 21, 1994, and Dec. 31, 2000.

Meanwhile, Gwen Resources (ASE) has negotiated to acquire a major shareholding position — some 5.25 million shares — in Deak in a private transaction.

Gwen has also been granted options to purchase an additional two million shares of Deak and a contingent right to receive a 56% interest in certain debentures of Deak in an aggregate principal amount of almost $2 million. The transactions will leave Gwen owning beneficially more than 7.5 million shares of Deak.

Gwen is controlled by brothers Alex and John Perron of Kirkland Lake, Ont., and Kelowna, B.C., respectively. Alex Perron will become president of Deak.