Addwest shelves plans to raise capital on Canadian market

In light of recent fluctuations in the Canadian financial market, Addwest Minerals (ala-v) has decided to postpone a fund-raising and stock rollback on the Vancouver Stock Exchange.

The Denver-based company recently completed a reverse takeover of Alina International Industries and now trades under that company’s ticker symbol. Charles Williams, president of Addwest, says the company will wait until the market settles before attempting to raise funds.

The company will change its name to Addwest Minerals International once the rollback occurs. The 1-for-10 rollback will give Addwest about 26 million shares.

Addwest owns a producing gold mine and a satellite target in Arizona, as well as an advanced-stage exploration play in Alaska.

In the Oatman district of western Arizona, the company’s Gold Road underground mine produced 40,000 oz. gold in 1996 at a cost of US$235 per oz. Williams expects cash costs to decrease during 1997. Reserves at the mine stand at 524,000 tonnes grading 0.23 oz. per ton, equivalent to 120,000 contained ounces. The company hopes to increase reserves beyond 1 million oz. in the future and, toward that end, is examining downdip extensions of the vein structure. Output at the mine stands at 500 tons per day, a capacity Williams hopes to see increased.

The Moss gold project, 8 miles northwest of Gold Road, hosts a resource, amenable to open-pit mining methods, of 7.4 million tons grading 0.038 oz. gold, equivalent to 281,000 contained ounces. The company is examining the feasibility of combining the two operations, in which case high-grade ore from the Moss project would be sent to the Gold Road mill, while lower-grade ore would be sent to a heap-leach facility. Williams anticipates lower capital and operational costs as a result.

The company completed 15,000 ft. of drilling on Moss last year and expects to carry out a prefeasibility study this year.

Addwest also owns the Golden Road project, situated in Alaska, 15 miles west of the highway linking Anchorage and Fairbanks. According to the company, Golden Road has the greatest potential for new reserves. The estimated resource stands at 6.6 million tons grading 0.1 oz. gold, equivalent to 675,000 contained ounces.

Addwest will attempt to expand known mineralization there this year and conduct a prefeasibility study on the main deposit. In all, the company controls 16,720 acres of prospective ground in Alaska.

According to Williams, Golden Road could reach production of 150,000 to 200,000 oz. per year without adding new properties to its portfolio there.

Williams says he hopes to raise money on the market for the expansion of gold production at Gold Road and for further acquisitions and development programs.

According to Williams, Addwest is content to remain in North America, though he admits that permitting in the U.S. can be difficult.

“Going abroad only trades one set of problems for another, such as land tenure and corruption,” he says. “Besides, there are still plenty of million-ounce deposits to be found in the U.S.”