Lots of talk but little action as Louvicourt partners mull new

St. Genevieve Resources (TSE) Chairman Pierre Gauthier recently fulfilled a promise to put a time limit on negotiations relating to the massive sulphide property east of Val d’Or, Que., of Aur Resources (TSE) and Societe Miniere Louvem (TSE). Gauthier has given Noranda until Sept. 10 to decide whether to purchase 4.1 million shares of Louvem for $8.10 per share from St. Genevieve.

In the event that any new deposits are found on the Louvicourt property, St. Genevieve retains, under the offer, the option to repurchase 75% of the offered shares at $8.35 per share for up to six months after the shares are sold.

As the offer is not tied to any settlement of litigation involving Aur and Louvem, Noranda, which owns 21.6% of Louvem, would be forced to make a follow-up offer to all Louvem shareholders if it accepts the offer.

If it doesn’t, Noranda would risk losing control of the 36-million-ton Louvicourt massive sulphide deposit, because St. Genevieve would then have 30 days to find another buyer for the offered shares.

That explains why Noranda Minerals Treasurer Lance Tigert has been holding “semi-daily meetings” with officials from Aur and St. Genevieve since the offer was announced, Aug. 27.

All of the companies involved are confident that a solution to the impasse can be found before Sept. 10 but none was prepared to speculate on what the solution will look like once it is reached.

While it is no secret that Noranda considers the $8.10-per-share price tag too high, Tigert told The Northern Miner that his company wants to continue to be involved with the Louvicourt orebody. As Noranda is required, under an agreement with St. Genevieve and Louvem, to purchase 400,000 Louvem shares from treasury at $10.50 each on Aug. 31, analysts expected a resolution to be announced before those shares were purchased. But Tigert declined to comment on the share purchase, which if completed, would increase Noranda’s investment in Louvem to $31.2 million from $27 million.

Analysts are speculating that Noranda doesn’t want to take over Louvem and assume that company’s share of Louvicourt’s development costs, without first reaching a settlement with Aur.

As Aur maintains that an alleged payment default by Louvem gives it the right to be operator of any future Louvicourt mine, may also end up as a passive joint venture partner if a Louvem takeover is completed. Under the original joint venture agreement, operatorship was scheduled to be transferred from Aur to Louvem once surface exploration was completed.

Aur Chairman James Gill told The Northern Miner that Aur’s right to continue as operator is not a subject that can be negotiated.