Black Monday threatens Queenston/Northfield deal

While Canadian gold stocks continue to recover from Black Monday, the Oct 19 stock market debacle is still playing havoc with the plans of some junior exploration companies.

Toronto-based Northfield Capital, for example, has delayed until Dec 15 the signing of a $50-million joint venture agreement to earn a 50% interest in Queenston Gold Mines’ wholly-owned Kirkland Lake West property.

The agreement was scheduled to be completed this week.

Thought by many to contain the projected western extension of the Kirkland Lake Main Break, the property is located 300 ft west of Lac Mineral’s Macassa mine site in Kirkland Lake, Ont.

As announced in October, Northfield has tentatively agreed to spend $50 million by 1994 to bring Kirkland West to a positive feasibility stage without any cost to Queenston.

Under the terms of the agreement, Northfield must spend $1 million and later $3 million on a 50,000-ft surface drill program before Dec 31, 1988.

However, since Northfield’s shares are trading on the Toronto Stock Exchange at a post-Black Monday level of 40 cents , the company isn’t sure if a planned flow-through share issue will be sufficient to fund the surface drilling program.

When asked if the deal was in jeopardy, Northfield President Robert Cudney replied, “If we can’t get the financing, we won’t go ahead with the deal.”

Meanwhile Northfield Minerals, a 58%-owned subsidiary of Northfield Capital, has raised $1.5 million by issuing 1,102,941 flow- through common shares at $1.36 per share to First Exploration Fund 1988.

Subject to regulatory approval, Northfield has agreed to issue First Exploration one warrant exercisable at $1.85 per share for every flow-through common share purchased.

Northfield Minerals says the proceeds will be used to fund underground and surface bulk testing at its Cheminis project near Larder Lake, Ont., where underground work via a 1,035-ft shaft is attempting to prove up tonnages within various zones.

Located just west of the Kerr Addison mine at Virginiatown, Ont., Cheminis hosts 2.6 million tons grading 0.16 oz gold per ton.

The Northfield group comprised of Northfield Minerals, Northern Ranger Minerals, Rockford Minerals and Eldorado Nuclear holds a 45% stake in the property while Toronto- based Golden Shield Resources retains a 55% interest.