Princeton, New Canamin to amalgamate

A proposed almagamation of Princeton Mining (TSE) and New Canamin Resources (VSE) is aimed at developing the Huckleberry copper deposit in northern British Columbia.

Shareholders of New Canamin would receive 1.25 Princeton shares for every single share held as well as a half-share purchase warrant exercisable for 14 months at $1.15 per Princeton share.

New Canamin’s Huckleberry deposit contains diluted, minable reserves of 91 million tonnes grading 0.517% copper and 0.014% molybdenum, plus 0.064 grams gold and 2.78 grams silver per tonne. The initial stripping ratio is 1.23-to-1.

A feasibility study, based on US$1 per lb. copper and 13,500 tonnes of mill feed per day, projects a net value of $200 million over a mine life of 18 years.

During the first five years, annual production is expected to exceed 60 million lb. copper at a cash cost of US64 cents per lb. (including smelting and transportation expenses, based on the Canadian dollar equivalent to US73 cents). Development costs are estimated at $135 million. The project has received environmental terms of reference from the provincial government, and New Canamin will file for a mine development certificate by March. New Canamin President Alan Savage tells The Northern Miner that Princeton clearly wants to proceed with development of Huckleberry, and he regards the amalgamation as very attractive in light of Princeton’s experience as owner of the Similco copper mine (in southern British Columbia) and its connections with concentrate buyers.

New Canamin, which will hold its annual meeting on April 12, has 9.7 million shares outstanding, whereas Princeton has 75 million. The proposed merger would result in Princeton’s having 87 million shares outstanding. In March, Princeton will begin mining the Ingerbelle deposit at the Similco mine. The deposit is expected to contribute roughly 35% of the total mill feed for 1995, with the balance made up from stockpiled ore. Minable reserves at Ingerbelle stand at about 47.9 million tons averaging 0.45%

copper-equivalent. Haulage distance is estimated at 4,000 ft. A daily milling rate of 27,000 tons is expected to yield 43.5 million lb. copper and 27,000 oz. gold in 1995, increasing to 48.5 million lb. copper and 33,000 oz. gold next year.

This year’s work program will entail drill-testing geophysical targets, as well as in-fill drilling at the Alabama deposit. That deposit contains 21.6 million tons grading 0.312% copper, plus 0.005 oz. gold, at a stripping ratio of 0.8-to-1.