New deal lifts Fish Lake deadline

A new property agreement effectively removes the deadline hanging over the Fish Lake copper-gold property southwest of Williams Lake, B.C.

To acquire the property, Taseko Mines (VSE) will pay Cominco (TSE) $20 million by May 31, 1995. Cominco will also retain 5% of the net proceeds from production to a maximum of $5 million.

Under the previous agreement, Taseko Mines was required to find a buyer by May 31, 1995, after which time the property would revert to Cominco, leaving Taseko with a 20% net profits interest (NPI).

In the event a buyer was found, Cominco was to have received 40% of the proceeds to a maximum of $48 million, based on a scaled formula. Under the new deal, the $20-million payment to Cominco will include an immediate payment of $2 million. The balance of $18 million is payable through the sale of Taseko shares.

Taseko will issue Cominco 1.6 million shares from treasury and will independently direct their sale into the market during the option period. If the proceeds from the resale reaches $18 million before May 31, 1995, the remaining shares will be valued at market price and applied to the royalty. In the event proceeds from the sale do not total $18 million, Taseko can either terminate the deal and revert to a 20% NPI, or pay the difference in cash or additional shares.

Taseko hopes the new arrangement will make the property more attractive to potential buyers.

On completion of a detailed prefeasibility study in the first quarter of 1994, the company plans to solicit offers for the project from senior companies.

At last report, the deposit was estimated to contain minable reserves totaling 960 million tons grading 0.23% copper and 0.0125 oz. gold per ton at a strip ratio of about 1.96-to-1.