When the deal closes, Regional will hold a 75.5% interest in the property with the remaining 24.5% held by Procan Exploration Co., a company controlled by the Hunt brothers of Texas.
Canamax, which operates three gold mines in Canada, has been selling non-gold assets. Earlier this year the company sold its interest in the Mt. Hundere zinc deposit in the Yukon for $10 million.
Regional, which had high hopes for the Midway deposit just three years ago, apparently has not given up on the project. The company is planning another underground exploration program which will include 1,200 m of underground development and 15,000 m of diamond drilling.
Designed to increase geological reserves from 1.18 million tonnes grading 410 g silver, 7% lead and 9.6% zinc per tonne, the program is expected to be completed by the first half of 1990, Regional says.
Budgeted at $7 million, the underground program will likely not include Procan participation and, as a result, Procan will be diluted. Nanisivik Mines, which is Regional’s largest shareholder, will contribute $2.1 million toward the program’s cost by subscribing for Regional flow-through shares priced at $7 per share. The share price is based on an agreement signed in 1984.
An additional $6.2 million will be provided by Nanisivik under a new agreement which prices Regional’s flow-through shares at $2.20 per share. The new agreement requires shareholder approval.
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