The takeover of Abo Resources by Bema International has received regulatory approval. The two are joint venture partners with Kerr Addison Mines in the Harrison Lake gold project 60 miles east of Vancouver.
Bema purchased 2.5 million Abo shares from a group of insiders, including Abo directors, in exchange for one million Bema shares, giving it a 30% interest. In addition, a private placement netting Abo $480,000 increased Bema’s controlling interest to 40%.
Kerr Addison, as operator of the Harrison Lake project, plans a $161,000 underground drilling program in April. On completion of the program, Kerr Addison (25%) and Bema International (35%) will have spent $1,750,000 to earn their respective interests in Abo’s property.
Kerr plans a second-phase program in the summer involving underground drifting on the second level, estimated to cost $955,000. Prior to this, Abo has the option to either form a joint venture with Kerr and Bema — maintaining its 40% interest by contributing pro-rata to further expenditures, or to defer its decision to participate until it receives notice from Kerr of a production decision, in which case Abo’s rights would be reduced to either a 25% participating interest or a 15% net profits royalty.
Should a production decision be made, the property is expected to produce 35,400 oz of gold annually at a unit cost of $190 per oz for a 10-year mine life. This is based on minimum of 2.4 million tons of mineable reserves grading 0.12 oz.
With the takeover, the following Bema directors have joined Abo’s board: Michael Beley, Ian Johnson, Richard Barclay, Clive Johnson and Gary Nordin. Ascher Smith and Bill Smith have resigned. Abo has working capital of $650,000 and is debt free.
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