Small percentages will determine Stikine’s future

As a result of Placer Dome’s (TSE) unsuccessful attempt to acquire a controlling interest in Stikine Resources (TSE), Corona (TSE) and Placer remain practically tied in the race to dominate the Eskay Creek junior. By its July 4 deadline, Placer had picked up an extra 0.3% in Stikine to bring its total interest to 45.3%, well short of control. Corona, through a revised deal with Stikine insiders, holds a 45% stake.

With both companies so close to a Stikine takeover, small percentages have become important. Euro- Nevada Mining (TSE), believed to hold a 6% interest in Stikine, could be the key to a controlling interest for either Corona or Placer. And last week, The Globe and Mail reported that Prime Resources Group (VSE), operator of the Eskay Creek gold project, holds another 3% interest.

Stikine owns 50% interest in Eskay Creek, the biggest Canadian gold discovery since Hemlo. Prime, managed by mining promoter Murray Pezim, owns the other 50%.

The future for Prime’s interest in Eskay Creek is even more of a mystery. Corona currently holds 31% interest in the company, but Murray Pezim and his associates have reneged on a previous agreement to sell their collective 14% interest to Corona. Some analysts believe Placer will make a bid for Prime while others are speculating that Corona will take control of the Prime and then negotiate with Placer to develop the mine. But, because of its other properties in British Columbia, including the Snip gold deposit, a Prime takeover would be expensive, at least relative to the Stikine price tag.

Corona has indicated that it would like to meet with Placer to discuss the possibility of a Prime- Stikine merger but neither company is revealing any definitive moves toward a resolution.