MSV share buy nets Kerr two gold plays

An agreement to purchase about a 20% interest in junior-mining company MSV Resources has given Kerr Addison Mines a stake in two promising gold properties in northern Quebec.

Kerr and msv have worked out a deal whereby Kerr will purchase, in a private placement and subject to regulatory approval, 1.2 million class A shares of msv at $3 per share. The deal will give Kerr a direct interest in the Eastmain prospect, located east of James Bay, in which msv is close to earning a 49% interest from Placer Dome. At the same time, msv will receive a cash boost of $3.6 million.

Indirectly, Kerr acquires, through msv’s small holding in Nova- Cogesco Resources, an interest in the Silidor prospect at Rouyn- Noranda. Nova-Cogesco has a 20% interest in Silidor; its partners are Noranda Inc. (55%) and Cambior Inc. (25%).

For Kerr, the msv share purchase is another indication of the company’s new vitality exhibited in 1986 when Kerr completed its acquisition of about 50% of Minnova Inc. (formerly Corporation Falconbridge Copper).

Since the Minnova deal, Kerr has sold its 24% interest in mfc Mining Finance Corp. (for $13.2 million) and sold its mine and mill complex at Virginiatown, Ont., and interests in area exploration properties to Golden Shield Resources. In return for the producing mine, Kerr received cash and other considerations totalling $20 million, five million Golden Shield shares representing about a 30% interest in the smaller company and options to boost that equity.

Kerr, which is 49% owned by Noranda and which can trace its origins back to 1936, is no longer directly involved in gold production. According to President Ian Bayer, Minnova, which is nearing production on a couple of new base metal projects (Winston Lake in northern Ontario and Ansil in northwestern Quebec) and which is expected to turn out about 85,000 oz gold this year, will account for all of Kerr’s 1987 “gold production.”

Other major assets of Kerr include 8 million shares (5.2% interest) in Noranda, a 13% interest in Canadian Hunter’s oil and gas properties and a 9.8% interest in a Valleyfield, Que., refinery, Canadian Electrolytic Zinc. (Both Canadian Hunter and the refinery are operated by Noranda.)

At the Eastmain project, the joint venture went underground this year. Reserves to date stand at one million tons ore grading 0.45 oz gold per ton. A pre-feasibility study on the project is scheduled for completion in March, 1988.

Kerr has interests in a number of other exploration projects across Canada.