Louvem to move Louvicourt stake into new company

In a bid to pave the way for financing of the Louvicourt Twp. copper-zinc deposit, Toronto-based Noranda (TSE) is spinning out a new company to shareholders of 52% owned Societe Miniere Louvem (TSE).

The new public company, to be known as Novicourt Inc., will own Louvem’s 45% interest in the US$326-million Louvicourt project, which is being developed for startup in 1995 by Aur Resources (TSE) and Teck (TSE).

Under a reorganization plan that has already been approved by Noranda and Louvem’s other major shareholder, St. Genevieve Resources (TSE), Louvem will continue as a publicly traded entity with a basket of exploration properties in Quebec.

If and when the plan is approved by regulatory authorities and a committee of independent directors, holders of Louvem’s 18.1 million issued shares will each receive one share of Novicourt for each Louvem share currently held.

As Aur has already arranged its 55% share of capital costs by granting Teck the right to earn a 25% interest in the Val d’Or, Que., property, investors have been waiting for Louvem to announce its financing plans.

In an interview with The Northern Miner, Lance Tigert, Louvem’s vice-president of finance, said the reorganization should make it much easier for the company to raise $112 million needed for mine development.

“We are having discussions with the banks right now and we hope to come to terms within a month or so,” Tigert said. He added that Noranda is still mulling over the question of whether it should follow Teck’s example by earning a direct interest in the project. Part of the financing for a 4,000-6,000-ton-per-day base metal mine could also come by way of a rights offering, he said.

Guy Pelletier, St. Genevieve’s vice-president of legal affairs, said the reorganization was necessary because of an earlier agreement giving Monique Exploration, now SEG Exploration (ME), the option to purchase Louvem’s Manitou mill and gold tailings project for $2 million.

At the Quebec Securities Commission’s request, that agreement has been cancelled and the assets have been sold to St. Genevieve, which has agreed to assume any environmental liabilities relating to the Manitou property.

Noranda had to agree to the reorganization in order to gain an exemption from takeover rules, which would have required it to make a follow-up offer to minority shareholders of Louvem. The Manitou mill was shut down in 1989.