MacDonald Mines regains shares in Gallen mine

A group of shareholders representing more than 10% of the issued shares of COATS-listed MacDonald Mines is trying to breathe new life into the mining company.

At a recent meeting in Montreal, the company elected a new board of directors, hired a new transfer agent and regained its 49% interest in Les Mines Gallen, a private company which owns a zinc-silver-gold mine in the Rouyn-Noranda area of northwestern Quebec.

“The main thing is we have that piece of property back in the MacDonald account,” an elated Milton Snow of Toronto, a director and one of the shareholders trying to get the company back on its feet, told The Northern Miner.

The company was left with nobody in charge at the end of 1987 when the former officers and directors resigned. Snow, in a letter mailed to shareholders prior to the Montreal meeting, had little good to say about the former company officials.

MacDonald’s partner in the Gallen operation is Noranda Inc. (TSE), which in 1982 chose to close down operations at the open-pit property located in Dufresnoy Twp. because of low base-metal prices. Noranda then re-opened the mine in 1984, only to close it again towards the end of 1985.

Estimated reserves at the property were reported in 1982 to be 1.8 million tons grading 5.4% zinc, 0.75 oz silver per ton and 0.028 oz gold.

MacDonald sued Noranda over the closing of the mine but lost the court case. MacDonald was unable to pay its lawyer, who in 1986 won a judgment against the company and seized all of the company’s assets, including its 499 common shares of Les Mines Gallen. At the Montreal meeting, the new directors of MacDonald reached a settlement with the lawyer in which the company re- acquired its 499 shares in Gallen in return for shares in MacDonald. Also, Central Trust has agreed to act as MacDonald’s transfer agent.

Elected at the meeting to sit on the company’s board of directors were Snow, Ralph Milrod, Herbert Andrews, Al Oksenberg, Andrew Pinkos and Marvin Meretsky.

MacDonald has about 5 million shares outstanding; its share price was listed recently at 30 cents on the over-the-counter trading system. Snow said the company is interested in acquiring new properties.