Deal makes Nuinsco an Echo Bay subsidiary

Through a financing agreement with Echo Bay Mines, Toronto- based Nuinsco Resources has raised $1.65 million for exploration at its northwestern Ontario gold properties, the company said recently.

As part of the agreement, which increases Echo Bay’s interest in Nuinsco to 51.14%, the former company is financing surface exploration on three properties (Rowan, Cameron and Dogpaw Lake) by lending Nuinsco $780,000 at prime plus 1%.

The loan is secured by an equivalent value in government exploration grants, Nuinsco says.

In a separate transaction, Nuinsco has raised $325,000 by issuing 130,000 common shares (at $2.50 per share) for non-flow-through exploration.

As a result, with $8.4 million in the kitty, Nuinsco considers itself fully equipped to finance a number of exploration programs until June 30 when the company expects to be at the feasibility stage at Cameron Lake.

Nuinsco is currently involved in the second phase of underground exploration at the Cameron Lake prospect near Kenora, Ont., where drill-indicated reserves on the Main zone now stand at 1.6 million tons grading 0.16 oz gold per ton to a depth of 1,100 ft.

While the Cameron Lake ramp is now about 15 ft shy of 750 ft and a diamond drill program on the 490-ft level is now complete, Nuinsco says it is waiting for assay results.

Meanwhile, Nuinsco and Echo Bay are spending $1.1 million to drive two drifts on the 490-ft and 685-ft levels. Nuinsco says it will finance the program by issuing to Echo Bay, 157,951 flow-through shares at $3.45 per share.

Work is also progressing at Nuinsco’s Dogpaw Lake project where the company is involved in a joint venture with Canadian Arrow Gold Mines. Located six miles from Cameron Lake, the property contains an estimated 96,650 tons grading 0.43 oz gold.

Nuinsco has agreed to spend $250,000 during 1988, but an additional $500,000 would give the company a 51% interest while Canadian Arrow retains 49%.