Cash-strapped Abermin sells Lara property to its partner

Strapped for cash because of problems at its Tartan Lake gold mine in Manitoba (N.M., Sept 5/88), Abermin Corp. (TSE) has been forced to sell one of its key mineral properties, the Lara project on Vancouver Island.

A $2.3-million offer for Abermin’s 65% interest in Lara has been made by Vancouver-based Laramide Resources (VSE) which already holds a 35%-working interest in the property

Roger Taylor, Abermin’s president, argued that the offer is fair to shareholders and it gives Abermin “the opportunity to obtain some cash which we can apply to working capital. We feel under the present circumstances it’s in the best interest of shareholders to accept it,” he told The Northern Miner.

Emphasizing it would still retain a 10%-carried interest in the project, Taylor said that Laramide will have to come up with the money by the end of October. Future exploration efforts will be focused on Abermin’s large land position in the United States, he noted, adding that: “we have not decided on any other asset disposition at this time.”

Laramide President Albert Reeve, who was the driving force behind the exploration and development of the Blackdome gold mine near Clinton, B.C., put the Lara property into the company.

Reeve predicted the financing arrangement probably would involve a private placement, one that could presumably lead to a change of control. He confirmed that negotiations for the financing “are reasonably well advanced” but could not elaborate further.

“We have a threshold commercial reserve there,” he claimed, adding that a 500-ton-per-day production facility “would pay back plus.” Infrastructure requirements would be minimal because a community exists nearby, power is available at the property, and ground conditions are generally good, he noted.

Reeve said this season’s exploration program at Lara has almost been completed and “it’s basically confirming the thickness and grades we got in our drill holes.”

Falconbridge, which has been drilling near its common boundary with Lara, has apparently picked up the zone. Indeed, it was in the bidding for Lara. Minnova Inc. (TSE), Canada Tungsten (TSE) and another company were also involved in the bidding. Reeve said he could take on a joint venture partner but he preferred to “see Laramide develop this little mine with what- ever help it needs internally.”

Since 1984, 230 diamond drill holes totaling 117,000 ft have been completed on the property. Drill indicated reserves now stand at 583,000 tons grading 1% copper, 1.2% lead, 5.8% zinc, 2.9 oz silver, and 0.14 oz gold.

Approximately 2,000 ft of underground development has been completed and massive sulphides have been intersected in four crosscuts over a strike length of 360 ft, Reeve said. Preliminary assay results from the first four crosscuts over a strike length of 350 ft show a weighted average grade of 0.93% copper, 0.78% lead, 6.8% zinc, 2.4 oz silver and 0.1 oz gold over an average width of 11 ft.