Centurion plans merger with Royal Silver

Centurion Mines (CTMC-Q) and its former subsidiary, Royal Silver Mines (RSMI-O), have agreed to combine.

The restructured entity will generate production revenue from a new copper mine in Utah, while also focusing on porphyry copper prospects in Chile and silver resources in northern Idaho.

As a first step in the merger, Centurion will buy Royal’s silver properties in the Coeur d’Alene district of northern Idaho, as well as additional patented properties, for US$1.5 million in Centurion shares.

Centurion has 31.3 million shares outstanding; Royal Silver, 13.5 million.

Centurion currently holds 1.1 million shares of Royal Silver.

Completion of the merger is subject to due diligence and regulatory approval.

Earlier in November, Centurion and its partner, Nevada Star Resource (NEV-V), announced plans to bring the OK copper mine, near Milford, Utah, into production by mid-1998.

All operating and environmental permits have been received, and construction has already begun.

Nevada Star will be the operator. Centurion will receive 2 million shares of Nevada Star and a 12% production royalty on all copper produced from the 144-sq.-mile area of interest. Centurion retains a back-in option through July 1, 1998, for a 30% interest in the project.

The OK mine is expected to produce 10 to 14 million lbs. of copper using the solvent extraction-electrowinning method.

Royal Silver brings to the merger five silver properties in Idaho, including the Crescent mine (adjacent to the Sunshine mine). In all, Royal Silver controls more than 35 million oz. of silver in the five properties.

The company is also participating in a joint venture with Teck (TEK-T) covering claims and concessions in excess of 100 sq. miles on the Mocha property in northern Chile. The property contains a known sulphide resource of 250 million tons grading 0.47% copper, plus an oxide resource of 40 million tons grading 0.7% copper.

Royal Silver also owns four formerly producing polymetallic mines in the western Mexican state of Nayarit.

The board of the as-yet-unnamed company will be composed of David Morgan, of Centurion; Howard Crosby, John Ryan and Kevin Stulp from Royal Silver; and Lawrence Keyes.