Belmoral selling Roddy stake to unnamed west coast group

An attempt by Belmoral Mines (TSE) to restructure an $8-million debt load took a new turn recently when it agreed to sell its interest in Roddy Resources (TSE) to a Vancouver-based group of companies. Belmoral, which holds a 22% stake in Roddy, has the right to increase its interest to 51% by way of a $5.4-million debenture which is convertible into Roddy shares at $2.04 each.

If the Vancouver group can get the financing, it will buy out Belmoral’s interest in Roddy and provide Roddy with $1.5 million needed to pay off creditors and bring the company’s Arizona heap leach project back into production.

Capable of operating at 1,000 tons per day, Roddy’s Big Horn mine produced 4,422 oz. gold last year. “Roddy needs the funds to invest in a new leaching pad and repair equipment as well as to do more stripping before continuing its mining and recovery operations,” said Belmoral in its 1989 annual report.

However, Belmoral is refusing to say who the Vancouver group is until it demonstrates the ability to obtain the necessary financing. The agreement is also subject to several conditions including the completion of legal, audit and engineering reviews.

“We don’t want to get too excited until all of those obstacles are overcome,” said Rene Galipeau, Belmoral’s vice-president of finance.

Proceeds, pending closure, would be applied by Belmoral to outstanding debt which consists of loans from both Aur Resources (TSE) and Central Capital. The two companies are each owed about $4 million.

“If we can reduce our debt by $2 million, it might make Central Capital a bit happier,” said Galipeau.

In 1989, Belmoral reported a loss of $34.5 million or 91 cents per share.