After selling a 43% interest in the Bateman Twp. project near Red Lake, Ont., Phoenix Gold Mines (TSE) strengthened its cash position in 1987 the company said recently.
As a result of the sale to McFinley Red Lake Mines (TSE), which leaves Phoenix with an 8.6% royalty interest after the former company recoups its costs, Phoenix increased its net cash position to $4.9 million from $1.3 million last year.
However, the Coniagas Mines’ subsidiary also reported a net loss of $1.6 million or 39 cents per share on Dec 31 compared to a gain of $124,583 or 3 cents per share in 1986.
Under a recent agreement, Placer Dome (TSE) can earn a 51% interest in Phoenix Gold’s Sturgeon River gold property by spending $2 million over a 3-year period. The agreement stipulates that Placer Dome must spend at least $300,000 during the first year.
Located near Beardmore, Ont., the property produced 73,332 oz between 1936-1942. It contains a 2,108-ft shaft and 15 levels from 125 ft to 2,080 ft.
When Placer Dome has spent $2 million at Sturgeon River, the two companies will form a 50/50 joint venture.
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