owl Creek, Hoyle Pond are attracting interest

There’s been a lot of potential buyer interest since it was reported that Falconbridge Ltd. was considering selling off its Owl Creek and Hoyle Pond gold mines at Timmins, Ont., according to Falconbridge Chairman William James.

Still, as Mr James said in an interview with The Northern Miner, the company’s plans regarding the two mines, which last year produced 63,000 oz gold, (83,000 oz expected this year), are far from firm as yet. He declined to name any of those enquiring.

A number of options are being considered, including what appears to be the most favored scenario of forming a stand-alone gold company, shares of which would be sold either to another mining company or to the public.

If the right price isn’t forthcoming though, (and Mr James indicated a valuation for the two mines of well over $300 million), he said the company would simply hold on to them, adding that cash flow from the two mines is about $23 million a year.

“We’re not in any hurry to sell,” he said. “It could go on for years.”

The Falconbridge chairman dismissed reports that analysts have valued the two mines (one an open pit, the other an underground operation) at from $100 million to $140 million. “If analysts can give us a gold property like that a t that price, we’ll buy it,” he commented.

Although the intention of any sell-off of the Timmins mines is as a debt reduction move, Mr James said that Falconbridge debt, currently at around $860 million (it was at about $1.4 billion at the start of 1986 when the Kidd Creek purchase was completed), is at least at a manageable level, even without any further cuts.

Nor, he said, do the plans for the two gold mines mean that Falconbridge is getting right out of gold and precious metals, having in the last year and a half sold its interest in Kiena Gold Mines, Giant Yellowknife Mines, and in Minnova Inc. (formerly Corporation Falconbridge Copper), with its Lac Shortt gold producer in northwestern Quebec.

In fact he said, if the two Timmins mines are kept in the picture, Falconbridge is today a bigger producer of precious metals than it has ever been, factoring in the eight million oz of silver that will be produced at Kidd Creek this year, another 1.7 million oz of silver at subsidiary United Keno Hill Mines in the Yukon, about 25,000 oz gold from its gold mine in Zimbabwe, and another 10,000 oz gold from its nickel mines in Sudbury.

(That silver production at Kidd Creek, in fact, makes it the biggest silver producer in Canada, ahead of such others as Equity Silver Mines, at around 5.5 million oz this year, and Brunswick Mining and Smelting, about 6 million oz.)

Falconbridge’s exploration programs, budgeted at around $20 million this year, also include a healthy emphasis on precious metals, particularly gold. Most of that money is going into exploration in the Sudbury and Timmins areas, Mr James said, and much of the emphasis in the Timmins area is on gold.

The company has no plans to sell either its Zimbabwe gold mine, nor its 34.8% interest in silver- producing United Keno Hill, he said.