By selling its wholly owned asbestos unit to Cliff Resources (TSE) in exchange for common equity, Princeton Mining (TSE) has effectively gained control of Cliff. Princeton estimates that it will own 75-80% of Cliff’s common equity after the share exchange. The agreement, still subject to shareholder and regulatory approvals, involves the issuance of treasury shares to Princeton in exchange for all the shares of Cassiar Mining. Cassiar is a wholly owned subsidiary of Princeton.
In addition, Princeton has agreed to provide Cliff with a $4-million loan that will be used to complete the construction of a wet milling process plant at Cliff’s Baie Verte mine site in Newfoundland.
Cliff’s wet milling plant will be the only one of its kind in the world. It is expected to be brought on stream within the next few months. The process technology, owned and patented by Cliff, provides a low- cost environmentally improved extraction technique from both ore and tailings. At design capacity the plant will produce 49,000 tonnes of high-quality pelletized fibre per year.
Cassiar, using both companies’ wet milling technology, plans to begin a feasibility study for the wet milling of its 14-million-tonne stockpile containing 3.5% asbestos fibre. The stockpile is at the Cassiar mine in northwestern British Columbia.
Cliff’s asbestos production will include 90,000 tonnes per year from the McDame underground deposit being developed at the Cassiar mine as well as 80,000 tonnes per year from Cliff’s open pit at Baie Verte.
As a result of the merger and the new wet mill, Cliff will produce about 200,000 tonnes per year of fibre, equivalent to 10% of the free world asbestos market.
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