Having recently raised $3.85 million in subscription funds backed by debentures, Deak Resources (TSE) is hoping to have commitments by the end of January for an additional $10 million to cover the cost of rehabilitating the old Kerr mill at Virginiatown, Ont., Andrew Taylor, secretary-treasurer, said.
Deak is completing negotiations, through a company called GSR Acquisition, to acquire the Kerr mill and mine property from bankrupt Golden Shield Resources.
The large Kerr mill, which served the gold-mining property there for a half-century, has three circuits. Plans call for one of the circuits to be modified to treat base metal ores, the feed material to be supplied from four properties in northwestern Quebec being taken over by Deak. A second circuit will continue to treat Deak’s own gold reserves while the third will be available for possible custom-milling work.
Investors to date in the Deak financing include Deak International Resources Holdings, which subscribed for $2 million, and J.M. Slack & Associates, which subscribed for $1 million. (Malcolm Slack, who controls J.M. Slack & Associates, is chairman of Deak Resources.) The debentures are convertible into common shares of Deak at 90 cents per share.
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