MRI seeking new ventures to replace Nanisivik

“We could easily undertake a new $100-million acquisition right now,” MRI President John Lamacraft told shareholders at the recent annual meeting.

“I suppose we could buy another base metal mine, but prices are high at present,” he said. “There is a lot of money around chasing the few good opportunities available.”

MRI recently recorded the best financial results for any quarter in the company’s history. First quarter net income was $11.7 million or 60 cents per share, compared with $3 million or 15 cents per share in 1988.

The company’s main mining assets are held through its wholly- owned subsidiary Nanisivik Mines, which operates a 2,000-tonne-per- day zinc-lead-silver mine on Baffin Island in the Northwest Territories. “A good mine combined with the recent strong zinc prices is a hard combination to beat,” said Graham Farquharson, president of Nanisivik Mines.

“But the day will come when the Nanisivik mine is no longer with us,” Lamacraft added. “We need to find another mine to keep our loyal and dedicated workers gainfully employed in the future.”

According to Lamacraft, the mine is becoming more complex, with many working places supplying ore to the mill. The main orebody accounted for roughly half the tonnage mined last year, he said.

MRI is planning to spend $2.3 million this year on three main exploration projects designed to locate another orebody in the Northwest Territories.

“One of the consequences of our prosperity is that we’re paying too much tax,” he said. “By putting some of our profit back into exploration, we hope to improve that situation.”

The company will spend about $1 million to look for new orebodies within 20 km of the existing Nanisivik mine, while another $800,000 will be spent on a grassroots exploration project situated in north Baffin, about 200 km from the mine. Work on the north Baffin project will consist largely of geological mapping and geochemical surveys to evaluate base metal targets.

A $500,000 exploration program is planned for the Tumpline-Turnback Lakes project north of Great Slave Lake in a joint venture with Aber Resources (TSE).

No work is planned for the Midway property in northern British Columbia until the company sorts out plans with its joint venture partners Regional Resources (TSE), and Canamax Resources (TSE).

“It’s been difficult to get our partners enthusiastic about the Midway project with silver prices currently at low levels,” said Farquharson. The Midway deposit hosts geological reserves of 1.185 million tonnes grading 410 g per tonne silver, 7.0% lead and 9.6% zinc.

MRI’s $24-million purchase last year of a 70% interest in Barrons Oil is seen by the company as a long-term investment designed to take advantag e of improvements in future oil prices. With some 20 years of petroleum reserves in place, Barrons principal producing property is its interest in the Taber North Glauconite pool in Alberta.

The company estimates its 1989 earnings per share will be $1.50, assuming current zinc prices hold out and there are no major fluctuations in the value of the US dollar.

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