Jascan, Atlantic resolve differences with new deal

The two companies had been unable to agree on a common future direction after selling their combined 45% interest in the huge Noxon silver-copper deposit in Montana to Noranda Minerals for $20 million.

But weeks of negotiations involving Jascan President Will Felderhof and Atlantic’s new controlling shareholder Robert Atkinson has resulted in an agreement which will strengthen Jascan’s exploration portfolio and leave Atlantic with $14 million in its treasury.

When the deal closes in mid- July, Atlantic will sell its 39.7% stake in Jascan representing 7.5 million shares to Toronto-based Faraday Resources (TSE) for $3.8 million. Faraday’s diversified resource assets include a 32.7% stake in Conwest Explorations (TSE) which in turn controls zinc producer Mineral Resources International (TSE).

Atlantic will also sell to Jascan its 40% stake in the Dawson gold project in Colorado, a 50% interest in the Georgia-based Royal Vindicator gold property plus a 10%-per- ton royalty stake in Noxon for $3.3 million.

In addition, Jascan is buying from Atlantic options plus shares of TerraGold Resources and an 11% convertible debenture of Australia- based junior gold explorer Argonaut Mining. Yet to be listed publicly, TerraGold was formed to hold a number of Newfoundland gold properties previously owned by Jascan and Atlantic.

In return, Jascan has agreed to withdraw a bid to acquire a 40.2% stake in Atlantic.

Although it is still subject to due diligence, the deal should leave Atlantic with lots of cash but very little in the way of exploration properties.

Control of Atlantic was recently acquired by Robert Atkinson, president and chief executive officer of Toronto-based stock broker Loewen Ondaatje McCutcheon and Co.

Atkinson retains control of Attic through Kash Investments, a private holding company which holds a 19.7% stake in Atlantic. Assuming the deal closes, Jascan will deal 629,300 Atlantic shares to Kash for $400,000.

“Between now and July we will sit down and figure out where we are going from here,” said Atlantic President Bill Burton. But he said no firm decisions on Atlantic’s future will be made until the deal closes.

“The agreement puts Jascan in an excellent position with a strong cash position of about $7.5 million, and some good projects,” Felderhof told The Northern Miner.

Having outlined 465,000 tons of grade 0.24 oz gold per ton at the Dawson project, Jascan plans to proceed with development but Felderhof doesn’t yet know how much will be spent on the project.

“With 142 million tons of grade 2.10 oz silver and 0.78% copper, the Montana-based Noxon royalty is also an important asset,” he said. Joint venture partners Montana Reserves and Noranda are spending around $200 million to bring the project into production.

“I think we had a good conclusion to what could have been an extremely messy affair,” said Burton.

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