Lytton’s amalgamation deal with Kiskaya Minerals Corp

Shareholders of Lytton Minerals (TSE) approved the amalgamation of the company with Kiskaya Minerals, a private company. The deal will see control of Lytton pass to Kiskaya shareholders, who will be receiving 20.58 million Lytton common shares.

The massive issuance of shares will swell Lytton’s outstanding common shares to 32.39 million from 11.8 million before the amalgamation.

Kiskaya’s assets include a 90% interest in a gold property located four miles east of Kirkland Lake, Ont. The 22 claims cover ground formerly held by Bidgood Gold Mines, which mined 586,367 tons of rock from 1934 to 1949. The grade averaged 0.25 oz gold per ton. A drill program completed by Lytton in 1987 failed to yield any economic results. Also, a study of the tailings dump concluded that the recovery of gold would be uneconomic at current prices, Lytton says. Despite the negative results, the company feels there are several exploration targets worth pursuing.

Kiskaya also has an agreement with Dolly Varden Minerals (VSE) which gives it the right to earn a 30% interest in Dolly Varden’s silver property near Alice Arm, B.C. for an expenditure of $3 million. The company can also earn a 50% interest in a gold property near Stewart, B.C., for an expenditure of $1.5 million.

William Christensen, who is the president of Dolly Varden, is also the president of Lytton. After the deal, Dolly Varden will control Lytton via its 57.1% stake in Kiskaya.

Lytton is better known for its gold play west of Hemlo, Ont., which created a market flurry in late 1984 on news of a gold discovery. Follow-up work failed to produce encouraging results and the option — which was burdened by several onerous covenants in favor of the vendor — was dropped. At that time, Lytton’s share price raced to more than $1.30 before tumbling back. The current price is around 18 cents .