Teck takes position in Redfern Resources

Subject to regulatory approval, Redfern has agreed to issue $700,000 worth of units at 90 cents each to two parties, one of them Teck. The other is a private company unrelated to Teck. Each unit consists of a flow-through share and one “callable” share purchase warrant exercisable at $1.25 for another flow-through share.

The proceeds will be used by Redfern to fund its portion of a major work program on the Tulsequah Chief project (N.M., Mar 6/89) with Cominco as operator. Additional underground drifting and drilling are planned this summer to better define known massive sulphide deposits. Reserves now stand at 2.4 million tons grading 2% copper, 1.25% lead, 6.3% zinc, 0.075 oz gold and 2.7 oz silver per ton. Following an expenditure of $104,000 in the upcoming program Redfern will have a 40% interest in the project.

Teck President Norman Keevil Jr, said the Tulsequah Chief “is one of those things that needs more tons but is wide open and has a reasonable shot of becoming a mine.” He confirmed that Teck spoke with Cominco to see if “they wanted to do it first” but was encouraged to proceed on its own.

Michael Kenyon, a Redfern director, said his company had agreed to a $1.5-million first-phase program with Cominco but it needed about $700,000 for the work. The recent financing will cover its portion of that phase which he predicted should be completed by early September. “Depending on the results, we could be stepping into a phase-two program which could be twice the original size,” he said.

Kenyon noted the second phase would be financed by the callable flow-through warrant which could raise another $700,000. Under the financing agreement, Redfern can request that Teck and the private company exercise their warrants when the money is needed.

“They have two weeks to say yes or know that they will exercise them at $1.25. If they don’t, the warrant is cancelled and we can run to NIM or some other company. So we have sort of locked in a potential second phase with the same guys,” he said.

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