Geddes Sept 26

Part of the funding will be in the form of a private placement of flow- through shares which will raise $2.77 million. Northgate Exploration (TSE), which controls Geddes, has also agreed to subscribe for 1.8 million units for a total of $2.9 million. The remainder of the funds will come from a rights offering being made to shareholders.

First Marathon Securities, Geddes financial agent, has agreed to take down two million units under the terms of the rights offering. Each shareholder will have the right to purchase a unit at $1.50 each. A unit consists of one common share and one warrant. The warrant entitles the holder to buy a share at $2 per share for each two warrants held for a period of three years. Shareholders will receive one right for each share held.

The flow-through shares being sold by First Marathon are being priced at $1.85 per share. The stock is trading around $1.55. The units being purchased by Northgate consist of one common share and one special share purchase warrant priced at $1.60 per unit.

The warrants give Northgate the right to buy one common share for each special warrant held at a price of $2 per share for a 3-year period.

According to Geddes, the underground exploration program, which began in March, 1987, has shown the Windy Craggy deposit to be one of the largest undeveloped mineable copper reserves in Canada. Situated in rugged, mountainous terrain, the deposit will be challenging to develop. The company feels that additional reserves can be outlined as a large part of the mineralized zone has not been investigated.

A prefeasibility study is expected this fall which will evaluate the viability of a 20,000-ton-per-day open pit mining operation. Initial bench scale metallurgical testing suggests the deposit is capable of yielding a good copper concentrate. A 200-ton bulk sample is being extracted from the adit.

The bulk of the reserves are hosted in two zones 300 m apart. Future exploration will test to determine if the two zones join at the apex of a fold.

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