Geddes needs major investor to underwrite Windy Craggy

A major international mining company will probably be involved in the development of the Windy Craggy deposit said Gerald Harper, president of Geddes Resources (TSE).

As $500 million is required to put the copper deposit into production, securing a major partner may be the only way Geddes can proceed with project financing, he told a small group of shareholders at the company’s annual meeting.

Harper said that a short list of potential candidates had been approached, but that it would be several months before the company announces a partner. Geddes has spent about $45 million on the northwestern British Columbia project to date, about $5 million of which is related to environmental expenses.

But in the meantime, the project is at a virtual standstill, awaiting the terms of reference for a Stage II assessment study and comments from the Stage I environmental review. Since management will be spending much of the summer “twiddling its thumbs,” Geddes has taken the opportunity to cut its board of directors in half.

Sylvester Boland, Douglas Little, Gordon Montgomery and Alan Savage have all announced their retirements. Michael Carter, a long-serving director, has left the board to pursue projects in Hungary. They have been replaced by John Kachmar, chief operating officer of Northgate Exploration (TSE) and Howard Cadinha, president of two oil and gas companies.

Harper says he would not be surprised if the second stage of the 3-stage assessment process took up to two years to complete. The study will include more detailed examination of such things as a waste rock disposal, water management and closure requirements.

Under a revised mine plan submitted to the government in December, 1990, minable reserves at Windy Craggy are estimated to be 131 million tonnes grading 1.8% copper. At a production rate of 30,000 tonnes per day, Geddes plans to transport concentrate through an underground pipeline.

In order to finance engineering studies and environmental test work, Geddes will complete a private placement for a minimum of $2.6 million and a maximum of $3.5 million. The placement will consist of special warrants priced at $1 and exchangeable for units of one common share and one half warrant. Northgate and Cominco (TSE), which hold 39% and 20% of Geddes respectively, have agreed to subscribe for $1 million and $500,000 of the placement.