NEWS IN BRIEF (August 05, 1991)

Estaurum Mines Ltd. (EMM:ASE) has changed its name to Westaurum Industries Inc. with a consolidation of capital on a 1-new-for-1-old share basis. The transfer agent is Central Guaranty Trust.

Toronto-based Denison Mines (TSE) has succeeded in easing at least some of its debt problems by agreeing to sell all of its oil and gas properties in Egypt for US$13 million in cash.

The properties consist of a 35% interest in the Meleiha concession and a 45% interest in the West Razzak concession, both in the western desert. Closing is subject to approval by the Egyptian government and other authorities.

Cash flow combined with the sale of its potash business and other oil and gas properties has allowed Denison to reduce its debt by $40 million so far this year. The uranium miner has also agreed pending approval from the Spanish government to sell its oil and gas assets in Spain for US$15 million. When those transactions are concluded, Denison’s corporate debt will drop to around $63 million from $95 million. However, holders of Denison’s 91/2% redeemable preferred B shares are stilled owed $175 million by the company.

Drilling continues at the Lac Frotet gold-copper exploration project north of Chapais, Que., joint venture partners Minnova (TSE) and Kerr Addison Mines (TSE) reported.

Pilot-plant scale mill testing has been encouraging, they said, and engineering studies are under way to determine capital and operating costs for the project.

At the end of June in the same general area of Quebec, Minnova hoisted and crushed the last ore from its Opemiska copper-gold mining operation. The mine was a producer for 38 years. The mill is being maintained on a standby basis in anticipation of the discovery of any new area deposits.

Both Minnova and Kerr reported lower net earnings during the first half of 1991 compared with last year. Kerr, which owns 50.4% of Minnova, announced cash and short-term securities worth $122 million as of June 30.

Improved volumes in potash shipments in both the North American and offshore markets, compared with last year, were reported by Potash Corp. of Saskatchewan (TSE) when it announced its second-quarter financial results.

“The domestic season was late and compressed when compared with previous years. As a result, sales in May, 1991, surpassed all previous levels for the month in the company’s history,” Potash stated in a press release. The Chinese market was mainly responsible for the better offshore sales. During the first half of 1991, 56% of Potash’s sales volumes were reported offshore.

Chairman C.E. Childers said sales prices during the first half of the year were higher for both domestic and offshore customers. The Saskatoon, Sask.-based company reported net income during the first half of the year of $28.1 million, more than double the earnings announced for the same period in 1990.

Guardian Resource Corporation (GUD:VSE) has changed its name to Guardian Communication Industries Inc. with no consolidation of capital. The new company has no interest in mining.

Seven widely spaced holes (over one kilometre apart) have been drilled to date on the Victoria Island copper project, a joint venture among Aber Resources (TSE), Highwood Resources (TSE) and a unit of Noranda (TSE).

Noranda is operator with a 50% interest, while the juniors hold a 25% interest each. This year’s 25-hole drill program is designed to locate the source of copper-bearing boulders discovered in 1990.

Having completed seven holes since drilling began last month, operator Noranda has intersected disseminated to massive sulphides on the Victoria Island property in the lower portion of a sandstone unit discovered last year. Thicknesses of 5-7 metres have been reported, but based on visual estimates, copper values in the sulphides are expected to be uneconomic. Aber reports that the source of the high-grade boulders has not yet been identified. At presstime, assays were available for only one hole which returned 0.32% copper over 7.6 metres (24.9 ft.).

Drilling is continuing on the property which is in Canada’s Arctic.

A new partner is being sought by Bitech (ASE) for development of its Nugget Pond gold property in northern Newfoundland. Bitech reported engaging securities firm Nesbitt Thomson as exclusive financial adviser to secure such a partner. Bitech said an option agreement with National Mineral has been terminated. The deposit contains about 500,000 tons averaging 0.37 oz. gold per ton, according to Bitech.

Equal partners Hixon Gold Resources (VSE) and Northern Abitibi Mining (ASE) say copper-zinc values returned in a 4-hole drill program at their Isle Dieu base metal property in Quebec are uneconomic.

The program was designed to test a strong off-hole geophysical anomaly identified last year and the Chislau copper showing about 300 metres further east. According to Hixon Gold, all four holes intersected a mineralized exhalative horizon consisting of a sulphide enriched cherty-graphitic unit known as the Boundary zone.

Although the Boundary zone has only been tested to shallow depths (260 metres), the mineralization, consisting of 10-60% sulphides over widths ranging from five to 50 metres, is continuous over a strike length of about 500 metres, Hixon says.

The partners will continue to evaluate technical data from the drill program before deciding whether to undertake additional exploration.