Syngold/Thunderwood merger expected after resignation

Toronto-based affiliates Syngold Exploration (TSE) and International Thunderwood Explorations (TSE) have agreed in principle to merge their exploration assets into a single company.

The decision to amalgamate follows the resignation of Syngold President Barry Simmons. He was recently appointed vice-president of explorations at the Pamour Inc. (TSE) and will assume his new responsibilities Jan 15.

“Rather than bring in someone else it seemed appropriate due to market conditions that the two boards would amalgamate,” said Thunderwood President John Heslop who will head the new entity.

Syngold has been trading at around 57 on the Toronto Stock Exchange recently while Thunderwood hasn’t fared much better at 70 *

With at least 26 exploration properties in their portfolios the two companies are members of the Aur Resources (TSE) group.

The proposed amalgamation will result in a larger, more diversified company with no debt and working capital of approximately $1.5 million, according to Heslop. “It will give us more flexibility and reduce our administrative expenses,” he said.

An independent investment dealer has been retained to assess the fairness of the proposed amalgamation and to determine fair exchange ratios.

If shareholders approve, the amalgamation will unite a number of properties which Heslop will consider priorities in 1989. They include Syngold’s 35%-owned Donalda project near Rouyn-Noranda where a $10 million underground exploration program is in progress. Syngold and partner Minnova Inc. (TSE) are attempting to prove up 804,000 tons of grade 0.25 oz gold per ton by dewatering an old shaft and drilling from the 1,000 ft level.

International Thunderwood will bring to the table its Gold Hawk and Pelletier Lake properties which are both at advanced stages of exploration. At the Gold Hawk project near Val d’Or, Thunderwood is conducting 1,600 ft of cross cutting and 460 ft of drifting in a bid to evaluate the continuity and mineability of a recently discovered gold deposit.

Operator Falconbridge Ltd. (TSE) is also attempting to increase drill indicated reserves of 650,000 tons grading 0.2 oz to about one million tons at the Pelletier Lake project near Rouyn-Noranda, Que.

Simmons told The Northern Miner that his decision to accept the Pamour offer is no reflection on either Syngold or the Aur Resources group. “All of the projects are going well and the new company has a bright future,” said Simmons who be will be responsible for production and exploration geology and acquisitions within the Pamour group. “It is a much more challenging position,” he said.