Several large shareholders in Consolidated Professor Mines (TSE) have agreed to an 80 cents-per-share takeover offer from Royal Oak Mines (TSE). For its part, Royal Oak will be looking at production plans and working on environmental approvals for the junior’s Duport gold project on Shoal Lake in northwestern Ontario.
Conwest Exploration (TSE) placed its mining interests, including a 41% holding in Consolidated Professor, on the auction block after a friendly takeover by Alberta Energy (TSE). Other shareholders, holding another 7%, have also agreed to tender their shares at Royal Oak’s offer price.
Royal Oak sees the acquisition as a good bet to expand production from its Timmins-based Ontario division. Royal Oak’s operations currently include the Pamour mine in Timmins, the newly producing Night Hawk Lake mine to the east, and projects in the Matachewan area that are scheduled to come on-stream this year.
The Duport project, Consolidated Professor’s principal asset, has a gross resource of 1.8 million tonnes grading 12 grams gold per tonne. A 1988 feasibility study proposed a 400-tonne-per-day operation with a capital cost of $52.8 million (in 1988 dollars). Shoal Lake is the source of municipal water for the city of Winnipeg, and some lakefront cottage-owners succeeded in derailing the project by raising concerns about its effect on water quality. The project is under environmental assessment.
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