Mount Wright awaits cash due from Spanish royalty

When Mount Wright Iron Mines finally gets the money it’s owed by Exminesa, the company that owns and operates the Rubiales lead-zinc mine in Spain, it should have a significant bundle of cash.

Mount Wright director Rolando Francisco says the company may well invest that money in mineral exploration. If so, it could revitalize a quiet company best known for its iron ore property in Quebec.

Francisco says Mount Wright estimated in 1977, when the Rubiales mine went into production, that Mount Wright’s 1% net smelter royalty would amount to $9 million over the estimated 20-year life of the mine. But Mount Wright hasn’t seen a penny yet. Whatever royalty is owing would be augmented considerably by compound interest.

In 1983, when the Rubiales mine produced 103,890 tons of zinc concentrate and 13,363 tons of lead concentrate, Mount Wright

estimated that the money owing from its royalty was about $900,000 not including compound interest. The costs of taking the matter to Ontario’s Supreme Court and to Spain’s equivalent of the Supreme Court, about $30,000 a year over seven years, were also awarded to Mount Wright in a 1987 court decision.

The money will come to Mount Wright eventually — Francisco compared the legal proceedings under way now to a sherriff seizing a company’s assets — because there are no further appeals left to the Spanish company after a 7-year legal battle. Mount Wright, however, has no way of knowing how long the process will take.

“In Spain they say ‘manana,’ ” said John Allen at the company’s annual meeting. John Allen was instrumental during the 1950s in revitalizing the predecessor companies that now comprise Lac Minerals (TSE), which owns about 48% of Mount Wright, and is Peter Allen’s father. Peter Allen is president of Mount Wright and is also president and chief executive officer of Lac as well as the second largest Lac shareholder.

Francisco, who is a senior vice- president and treasurer of Lac, was the only director of Mount Wright at the annual meeting. Peter Allen was away on a business trip. Harrison Rutetzki, identified in Mount Wright’s information circular as Lac’s vice-president of operations, was elected to the Mount Wright board at the meeting to replace Dennis Sheehan. Rutetzki was on holiday.

The Rubiales mine is still in operation. At the end of 1984, the last year for which figures are available, reserves stood at 12.2 million tons grading 6.9% zinc, 1.08% lead and 0.4 oz silver per ton. Exminesa is 48% owned by Cominco (TSE) of Vancouver.

Mount Wright came to prominence after it staked in the late 1950s six mineral claims in northern Quebec adjacent to the Quebec Cartier iron mine.

Mount Wright continues to maintain its Quebec claims in good standing although there is no production from them today.