Normetal, La Sarre deal with Cominco

Affiliated companies Normetal Mining (ME) and La Sarre Mining (ME) have struck a deal with Cominco (TSE) to fund exploration on the former companies’ claims adjoining the past-producing Normetal copper-zinc mine, 15 miles north of La Sarre, Que. The agreement, which covers some 19,000 acres held jointly by the juniors, does not include Normetal’s currently producing Normetmar zinc mine.

In the centre of the optioned claim group is the former Normetal mine, which produced some 10 million tons of base metal ore grading 5.3% zinc, 0.79% copper along with gold and silver values during 1937-1975.

Normetal is producing zinc from a small base metal orebody called Normetmar, about one mile west of the old Normetal mine.

Normetal and La Sarre will transfer their joint interests in the Normetal exploration property to a new private company in exchange for that company’s shares. Cominco will subscribe for $1.87 million in flow-through shares of the new company, 300,000 Normetal shares at $1.50 and another 450,000 Normetal shares held by Normetal management.

In June, the 35% interest in the Normetal property currently held by the Nor-Sarre Ltd. Partnership will be transferred to the new company for additional common shares.

As a result of the transactions, Cominco will hold 15% of Normetal’s common shares, and 34.5% of the new company’s shares, with Normetal and La Sarre owning the new company’s remaining 65.5%.

Cominco also has the option to increase its interest by subscribing for another three million shares of the new company at $1.50 per share up to January, 1993. The subscriptions will be used to finance exploration work on the property with Cominco as operator. Subject to regulatory approval, the deal is scheduled to close on April 3.