Aur has agreed to lend $4 million on a short-term basis to Belmoral, which has been struggling to reduce operating costs at its two mines in the Val d’Or, Que., area.
The loan will be repayable by Feb 28, 1990, and, subject to regulatory approvals, may be converted into common shares of Belmoral at 60 cents per share. (Belmoral, with about 41 million shares outstanding, was recently trading in the 65 cents range.)
The loan will be advanced upon the signing of a 4-year custom- milling agreement whereby Belmoral will treat ore from Aur’s Kierens gold mine and Norlartic property in the Val d’Or area. Belmoral, which produced almost 45,200 oz gold in 1988, reports it has excess capacity at its mill.
Aur has underground access to the Norlartic property, a former gold producer in which Nova- Cogesco Resources (TSE) has a 30% interest, from the Kierens mine. Production at the Kierens mine commenced in October, 1988, but treatment of the stockpiled ore was stalled pending a decision on milling.
Reserves (all classes) at the Kierens property stand at 860,000 tons averaging 0.22 oz gold per ton, to a depth of 1,600 ft. The deposit is open at depth. At the Norlartic prospect, reserves at the end of 1988 stood at 1.1 million tons grading 0.14 oz.
Aur has been much in the news following the discovery this past summer of a copper-zinc massive sulphide deposit east of Val d’Or. Aur’s partner in the exploration project is Societe Miniere Louvem (TSE).
The two companies have hinted at a closer relationship in the future involving further financing agreements and/or an equity investment by Aur in Belmoral. The current transactions have entitled Aur to one seat on Belmoral’s board of directors.
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