Sale of Whim Creek assets unaffected by suitor bid

Owned through holding company Reveltek Ltd., Whim Creek’s offshore interests, which included a 46% stake in Westfield Minerals (TSE) of Toronto, were recently sold to American Resource of Bermuda for $25.8 million (A).

American Resource is part of a huge network of assets controlled by the Bronfman family through Hees International Bancorp of Toronto.

Even though Dominion’s bid for Whim Creek has been rejected, the Reveltek shares have been bought and paid for, according to American Resource President Danes Varma.

“We are not aware of anything that could jeopardize our deal,” said Varma who was recently appointed to the Westfield board.

Also unaffected by the Whim Creek/Dominion impasse is the sale of Northgate Exploration (TSE) and Westfield Minerals’ combined 15% stake in Whim Creek to Dominion. Northgate is based in Toronto.

If Dominion Mining’s takeover offer for Whim Creek is successful, the new combination will emerge as a force to be reckoned with in the Australian gold mining scene.

With a market capitalization of $418 million the new group would become one of Australia’s largest gold producers (behind Western Mining and Placer Pacific Ltd.) by churning out 350,000 oz gold this year from six mines. Western Mining expects to produce 899,000 oz while Placer Pacific is planning for 660,000 oz this year.

Under a revised offer, valued at $220 million, Dominion is offering nine of its own shares for every five Whim or eight Dominion shares and $1.25 cash for every five Whim Creek shares.

Meanwhile, Whim Creek is busy calculating reserves at the wholly- owned Prohibition gold project at Meekatharra in Western Australia where some drill results were released recently.

The Prohibition orebody is one of four currently being mined by open pit methods on the Paddy’s Flat tenaments feeding two nearby plants. The operation produced 94,352 oz gold last year.

Recent drilling consisting of 33 reverse circulation holes and eight diamond drill holes, focused on a mineralized zone extending from 120 m to 200 m below surface.

Highlights from reverse circulation drilling included 2 m of grade 16 g per ton and 59 m of 5.82 g. The most significant intersections from diamond drilling were 13 m of grade 11.87 g and 25 m of grade 5.04 g.

New reserve calculations at Meekatharra (where reserves stand at 10.4 million tonnes grading 2.45 g) should be announced in Whim Creek’s next quarterly report, the company says.

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