Toronto-based Campbell Resources (TSE) has agreed to buy the Santa Gertrudis gold mining operation in Mexico’s Sonora state.
The vendor is a subsidiary of Phelps Dodge (NYSE) of Phoenix, Ariz., which will receive US$10 million for the sale.
The 9-by-2-mile property is thought to have excellent exploration potential, being in a geological environment similar to that of the Carlin Trend in Nevada.
The property hosts 15 known gold deposits and Campbell plans to spend up to US$5 million exploring and developing these occurrences over the next three years.
To finance the acquisition, exploration and development, Campbell will issue up to US$15 million worth of 7.5% convertible debentures and up to US$5 million common shares at US50 cents each.
Recently, Campbell filed a final short-form prospectus in all Canadian provinces, except Quebec, for the convertible subordinate debentures. The sale of the debentures and of the property is expected to close this week. Campbell’s annual gold production is expected to rise 106,000 oz. in 1996 from the current 65,000 oz.
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