A formal offer will be mailed shortly to Canadian shareholders of QPX Minerals (TSE) providing more details of a recent offer by Rea Gold (TSE) to acquire all their QPX shares in exchange for common shares of Rea Gold. .TRea Gold recently advised QPX’s board of its intention to make the offer on the basis of one Rea Gold share for every 3.4 shares of QPX tendered to it. The offer would also be made to Placer Dome (TSE) which currently owns about 27% of QPX.
QPX President Tim Ryan said the company will wait until it receives Rea Gold’s bid circular before it comments on the offer, although it is keeping an open mind in the meantime.
“There are many issues at stake here besides the share exchange ratio,” he said.
QPX Minerals’ key asset is its 100% owned QR gold deposit about 45 miles from Quesnel, B.C. The company received an independent feasibility study last summer which recommended the QR deposit be placed into commercial production. The project has already moved through two of three stages of the provincial mine development review process.
The feasibility study was based on diluted minable reserves of 1.3 million tons grading 0.17 oz. gold per ton. At a targeted production rate of 825 tons per day, the mine is expected to produce about 44,000 oz. gold per year, or a total of 190,000 oz. gold over 4.3 years. Cash operating costs have been projected at US$304 per oz.
Minable reserves are contained within three separate but related zones. Initial production would be derived from open pit mining of the Main zone, with development of the underground West and Mid-West zones taking place during the later production years. Additional reserves classed as possible are expected to add to the mine’s operating life.
Based on extensive metallurgical work, QPX expects recoveries exceeding 94% by using a carbon-in-pulp milling process. Capital costs are estimated at a modest $22 million, But it appears financing the project has been a stumbling block for QPX in these tough economic times.
“We don’t expect we would have any trouble financing the project,” said Larry Reaugh, president of Rea Gold.
Rea Gold has a 30% working interest and a 5% net smelter royalty in the profitable Samatosum mine operated by Minnova (TSE), north of Kamloops, B.C.
The operation began open pit production in 1989, and the mine operated smoothly throughout 1990. Rea Gold said almost 10% additional throughput to 511 tons per day was maintained for the year which helped offset lower-than-expected prices for gold and silver.
In 1990, more than 5 million oz. silver were produced into a total of 18,072 tons of base metal concentrates which contained 3.2 million lb. copper, 7 million lb. zinc, 5.8 million lb. lead and antimony and almost 9,000 oz. gold.
Equivalent silver production (which includes credits for gold and base metals) totalled 7.9 million oz. at an equivalent cost of US$1.82 per oz.
Rea Gold reported a net profit of $277,705 or 2 cents per share in 1990, compared to a loss of $2 million or 16 cents per share in 1989.
I worked at the mine underground in bet 1961-1963.
Then I was one of the best mackmachine operator.i think then I was doing bet 50-60 mining car of ore a shift.
I loved working there but I was very young and was time to move on.
lived there as a child,dad was the blacksmith there, wish we didn’t have to
move but mind was closing moved to nova sctioa but still think of renabie as home sorry to hear nothing there now but looking forward to coming back the summer to see how it is now.
I lived there are a child from 1953 to 1958, my dad Viktor worked in the boiler room, we had a great time as kids, 2 room schoolhouse, fishing at Baltimore Lake, swimming at Rennie Lake, picking blueberries, what a great life, tonis kilp