LETTERS TO THE EDITOR (August 05, 1991)

Thank you for your article (T.N.M., July 22/91) updating readers with information on the Edwards project in the Wawa, Ont., area. I understand that the source material was Spirit Lake Explorations’ 9-month financial statement and letter to shareholders sent out on June 27.

In the letter to the shareholders, it was mentioned that surface drilling and underground sampling programs were scheduled for this summer, at an estimated minimum budget of $1 million.

For the record, the program is still in a planning stage with financing arrangements not yet finalized. Numerous regulatory permits to carry out the work are being applied for, so that commencement of work subject to financing and permitting will not happen until maybe the end of August. In my view the headline of the article, “Spirit Lake spends $1 million working Edwards prospect,” presents incorrect information to the shareholders and potential investors. The program that we hope to debt finance with a minimum budget of $1 million has not been officially started. D.M. Hendrick

Vice-President of Operations

Spirit Lake Explorations

It was with great interest that I read the article “Deak pegs earnings forecast on Virginiatown custom mill” (T.N.M., July 1/91).

It was great to see the company realizing a profit once again. But at whose expense?

At the time of the bankruptcy, the company owed millions to the employees in holiday, termination and severance pay. The former employees who have found employment elsewhere and will not be returning are the ones paying for that profit right now.

Here is just one example. My husband worked 27 years for Kerr Addison Mines and then two years for Golden Shield Resources, until it went bankrupt on June 28, 1989. At this point in time, he was owed holiday pay of $4,232.22, termination pay of $4,000 and severance pay of $14,362.40 — a total of $22,594.62.

In August, 1989, at the age of 50, my husband fortunately found another job. Better wages, better benefits, better working conditions and better relationships between company and employees. We sold our home in Virginiatown, Ont., and moved to Marathon, Ont.

How can a company realistically expect people to put their lives on hold for two years when they have mortgages and other obligations to meet? Between July, 1989, and June, 1991, my husband received $500 from the Bankruptcy Court and $600 from GSR Mining toward the holiday pay owed him. On June 19, 1991, my husband received a letter from GSR Mining dated June 12, 1991. A letter of recall, stating if he did not return within 14 calendar days, he would be considered terminated. Therefore, the company would not have to pay his termination or severance pay.

They would give him one share for every $2.50 owed to him. They would give him 7,344 shares trading at 26 cents a share, which would be $1,909.44. This does not include the $3,132.22 still owing in holiday pay. This is all he would receive for 29 years of service.

When I contacted the local union representative regarding this matter, I was told it was “bad timing.” Yes, bad timing for the man who gave 29 years of his working life, but good timing for GSR Mining (Deak) since now it won’t have to pay what it owes my husband and many other former employees. Doreen Young

Marathon, Ont.

While I fully support the overall view expressed by M.R. Brown in his article “Australia’s Coronation Hill could happen here” (July 15/91), I would like to correct a couple of inaccuracies concerning Australian law and policy.

The reference to the recent imposition of a “bullion tax” on gold mining in Australia is not correct. Rather the change, which came into effect on Jan. 1, 1991, consisted of a repeal of a long-standing exemption from income tax on income derived from the working of a gold mine in Australia. This brought gold mining under the same general tax regime as other forms of mining activity, which have not been entitled to such an exemption for decades. This change was, of course, clearly disadvantageous to gold mining, which flourished in the 1980s under Australia’s income-tax-free regime. The second inaccuracy is that the “Labor Party is currently debating a policy that would restrict uranium output in that country to all but three mines.” In fact, a Labor policy to restrict uranium production to the three mines operating in 1983 has been in force since Bob Hawke came to power. A short debate on whether to change this policy took place at the Labor Party National Convention in June this year, but the policy was upheld, despite significant opposition from the right wing of the party.

It now seems unlikely that any policy change will occur until at least Hawke is replaced as leader, and probably not until the Labor Party loses government in Canberra.

Roger Gibson, partner

Price Waterhouse

Sydney, Australia