VSM, Serem plan major underground program for Grevet

An underground exploration program at the Grevet zinc project in northwestern Quebec is planned by VSM Exploration (ME) and Serem-Quebec.

An agreement-in-principle has been reached by the two companies for a $26.3-million program to be carried out during a 16-month period at the property southeast of Matagami. The work would include sinking a shaft to 925 metres, development of the 4th, 5th and 6th levels, 1,530 metres of exploration drifting, 3,860 metres of diamond drilling and the completion of a feasibility study.

Upon completion of the program, VSM would acquire an additional 20% property interest from Serem, a French-controlled company, boosting VSM’s interest to 70%.

Montreal-based VSM is about to gain a new owner. Cambior (TSE), which earlier this year acquired control of the Grevet project from Placer Dome (TSE), says it plans to bid for all of the issued and outstanding shares of VSM not owned by Cambior. The company currently owns about 10.8 million shares (48.6%) of VSM.

Cambior is offering 70 cents per share or one common share of Cambior for each 16.5 common shares of VSM.

Cambior says it will provide at cost, plus a 5% overhead charge, all services required by VSM for the Grevet underground program. An interim arrangement between the companies calls for Cambior to make advances worth up to $5 million to VSM.

Three deposits have been identified at Grevet containing combined minable reserves of 11.5 million tonnes averaging 9.08% zinc, 0.47% copper and 36 grams silver per tonne (based on a zinc price of US54 cents per lb. and a copper price of US$1 per lb.).

VSM recently concluded two agreements regarding some of its other properties. Minnova (TSE) has been given the option to earn a 60% interest in VSM’s Fancamp properties. And Ressources Unifees Oasis (ME) has an option to earn a 50% interest in VSM’s Verneuil M and L properties.