Toronto-based Hemlo Gold Mines (TSE) has agreed to forgive most of a $8.9-million loan made to Windarra Minerals (TSE) in 1988. The junior will repay Hemlo $1 million.
Windarra used the loan to finance its share of exploration and development on the Magnacon gold mine near Wawa, Ont., which was officially opened in the summer of 1989 but never reached commercial production. The mine and mill have since been mothballed.
The medium-sized gold producer also plans to sell all of its 5.7 million shares, or 29% stake in Windarra, to various parties. Windarra recently traded at 25 cents, compared with a range of 70 cents-$1.58 in 1988, when Hemlo made its initial $6.5-million investment.
In 1990, Hemlo took a $14.9-million writedown on its investment in and advances to Windarra.
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