Northair fends off hostile takeover bid

As anticipated, Northair Mines successfully defended a hostile takeover bid by Nanaimo-based Nor-Quest Resources. At the annual meeting a relieved Northair President Donald A. McLeod announced almost immediately that Nor-Quest had declined to nominate its opposing slate of directors to the board.

Three days before the meeting he issued a news release stating that Nor-Quest’s “attempt to take over Northair Mines Ltd. was a total failure.” Only 103,150 shares were tendered to Nor-Quest which had offered one of its shares plus $1 cash for two Northair shares. The takeover bid was exceedingly hostile and the meeting was packed, probably in anticipation of a confrontation. But it was a relatively sedate event with Northair board members appearing more relieved than victorious.

Mr McLeod thanked shareholders for “their overwhelming support,” confirming that more than 90% of the shares represented at the meeting voted in favor of management. Admitting he “wasn’t all that sure I’d be here,” he emphasized that Northair programs were not affected by the proxy fight. Indeed, he confirmed that a contract had been signed to dismantle the company’s Brandywine mill near Squamish this August. The plant will be moved to its Willa gold property in southeastern B.C., the principal asset Nor- Quest was after.

Dismantling and transportation costs are expected to be around $295,000 and he said a firm bid of $1.9 million has been received for re-erecting the mill and expanding its capacity from 350 to 500 tons per day. That plant has been on a care-and-maintenance basis since operations were suspended at Brandywine five years ago.

Meanwhile, the $2.1-million exploration and development program at Willa is under way. The program consists of an additional 2,500 ft of underground development, 9,000 ft of underground drilling and a Stage 1 report for a final feasibility study. After the program is completed, Northair will have a 68% interest in the property. BP Selco and Rio Algom are participating as well.

Mr McLeod noted that additional sampling of hole 86-93, which was completed in 1986, revealed values of 0.35 oz gold over 13.1 ft. This intersection is outside the known West zone and indicates a possible parallel structure or an offshoot of the existing zone, he said. Recent drill results in the main zone included a 10-ft intersection of 0.28 oz gold and a 3-ft section in the same hole averaging 0.34 oz which could indicate “the possibility of an additional mineable zone of similar nature to the west zone,” he said.

Separately, Northair has the right to earn a 37.5% interest in Noranda Explo ration’s Stewart property near Thunder Bay, Ont. Eleven holes have been completed in the $187,500 drill program and the best results included 6.6 ft of 0.48 oz gold and 6.6 ft averaging 0.14 oz. The mineralized zone has been extended to a minimum 575 ft along strike over 30-50-ft widths. It’s open in both directions and to depth.

A major program is under way at the Long Lake property in Newfoundland. Northair can earn a 35% interest from partner BP Selco. No drilling has been done but visible gold has been reported from surface samples. A large soil geochemical anomaly is now being stripped and trenched and surface diamond drilling will begin this August. Three gold occurrences have been noted at sites about one-half mile to the west which are being sampled.