After more than a year of delays,
Wesdome began trading in late January on the Montreal Exchange, with 17.3 million shares issued and outstanding and 8.3 million shares reserved for issuance.
Wesdome Gold Mines owns seven contiguous exploration properties, including Siscoe, Siscoe-Extension, Wesdome, Lamothe, Lamothe-Extension, Yankee Clipper and Callahan. These are situated beneath and along the shoreline of Lac de Montigny, near Val d’Or, Que.
The key property of the bunch is Wesdome, situated directly north of
Five of 12 known gold-bearing zones at Wesdome are estimated to contain a total of 2.8 million tonnes grading 4.36 grams gold per tonne, or 393,000 contained ounces (T.N.M., May 25-31/98 and Oct. 19-25/98). An in-house estimate of resources in zone “A” stands at 600,000 tonnes grading 5.16 grams gold.
While work at the Wesdome property dates back to the 1930s, the project was more recently a 30-70 joint venture between Western Quebec Mines (a company better known for its 41% stake in gold producer
Western Quebec Mines held a right of first refusal on Wesdome and, when Placer decided to shed its Val d’Or assets in 1997, purchased the major’s share for $1.1 million and a 1% net smelter return royalty (NSR).
Since then, Western Quebec Mines has spent roughly another $3 million exploring Wesdome.
In early 1999, Wesdome completed a $799,200 financing by privately placing 222,000 treasury flow-through shares at $3.60 per share. A headframe and hoisting equipment were procured for a 400-metre exploration shaft that will be sunk on Island No. 3 in Lac de Montigny.
In October 1999, in preparation for the initial public offering (IPO), Dynacor and Western Quebec Mines struck a deal whereby the former transferred to Wesdome Gold Mines its 100% interest in the nearby Siscoe property, as well as its 75% interest in the adjacent Siscoe-Extension property, in return for just over 2 million Wesdome shares and a 3% NSR, subject to a 1% NSR buyback for $500,000.
Wesdome Gold Mines then acquired the remaining properties from Western Quebec Mines in return for 11 million Wesdome shares.
After those transactions, but prior to the IPO, Western Quebec Mines and Dynacor owned 84.5% and 15.5%, respectively, of Wesdome Gold Mines.
In its IPO, completed in January 2000, Wesdome raised $3.6 million by selling 1.9 million flow-through units (priced at 90 each for $1.7 million) and 2.4 million non flow-though units (priced at 80 each for $1.9 million).
Each flow-through unit consists of one flow-through share and one warrant; each non-flow-though unit consists of one share and one warrant. A single warrant entitles the holder to buy one flow-through share for $1.05 up to Nov. 30, 2000.
Proceeds will be used, in part, to continue underground exploration of the Wesdome property. Work has now resumed on surface infrastructure, including buildings, wharves and a power supply.
While still well short of the required funds, Wesdome has proposed a 2-year, $14.2-million program consisting of mine site preparation, shaft-sinking, underground development and diamond drilling.
In early February, Dynacor distributed 1.1 million Wesdome shares as a dividend to its shareholders on the basis of one Wesdome share for every 27 Dynacor shares held.
In a separate development, Dynacor has raised $1.4 million by privately placing 8.4 million units priced at 15-20 apiece. Each unit consisted of one share and one warrant allowing the holder to buy another share at prices ranging from 20 to 26.
The buyers of the units were a private company, a group of investors, a European bank and an overseas mutual fund.
The funds will be used mainly to expand Dynacor’s 70%-owned Acari gold mine in southern Peru, which produces, on average, only 316 oz. gold per month.
A third vein at Acari was recently put into production, and two others are being evaluated. The junior has also been working to improve the performance of the Acari mill.
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