Franco-Nevada to explore Redstone copper deposit

Franco Nevada Mining (TSE) which holds a royalty interest in the huge Goldstrike gold mine in Nevada, has agreed to acquire a major slice of a large Northwest Territories copper deposit.

In a bid to benefit from a tight copper market and record prices which climbed to $1.60(US) per lb recently, Franco-Nevada is spending about $500,000 to acquire a 26.5% interest in Redstone Resources (TSE).

A 15%-owned affiliate of Toronto- based Nufort Resources (TSE), Redstone’s main asset is a 37 million ton (grade 4%) copper deposit which is situated in a 21 square mile area known as the Nahanni mining district.

Under the agreement Franco- Nevada is acquiring 1.2 million Redstone shares from Nufort and former Redstone President J. A. Harquail at 25 each. In a separate transaction, Franco-Nevada President Pierre Lassonde will pick up 200,000 shares from Harquail at the same price and when an additional 1.6 million shares are acquired by Franco-Nevada from the Redstone treasury, Franco-Nevada and its associate will hold a 40% stake in the company. While it was discovered years ago by former Falconbridge Ltd. (TSE) Chairman Thayer Lindsley, the deposit has never been developed because of its remote location and awkward setting.

The copper mineralization is situated in a flat 3 ftx4 ft zone which means that if it is ever developed, the operator may have to use the type of machinery normally associated with coal mining.

This summer, Lassonde said he hopes to outline about 10 to 20 million tons before dealing Franco- Nevada’s interest to a large, possibly Japanese, operator.

Coincidentally, Harquail’s son David is an assistant vice-president at Toronto based Beutel Goodman where Lassonde is senior vice- president. Franco-Nevada Chairman Seymour Schulich is also President of Beutel Goodman.