Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canadian junior gold miner Golden Predator Corp. (TSX:GPD) has agreed to buy the Brewery Creek project in the Yukon from Alexco Resource Corp. (TSX:AXR) in a cash-and-stock deal worth about $8 million, announced the company today.
The junior said that the deal replaces an earlier option agreement that had given it the right to earn up to a 75 per cent interest in the project located in the northwestern region of the Yukon, Canada.
Complete ownership in the Brewery Creek Project is “a major milestone on the road to becoming a gold producer in the Yukon,” said William M. Sheriff, Chairman & CEO.
“Under our multi-phase development plan we will turn our immediate attention towards the completion of engineering studies. These studies will be aimed both at resuming gold production from the existing leach pad as well as completion of the original mine plan,” Sheriff added.
The Brewery Creek Project is a past producing heap leach gold mining operation in the Yukon. A total of 278,484 oz Au was produced from seven near-surface oxide deposits along the property’s Reserve Trend from 1996 through 2002, when the mine (then operating under Viceroy Resource Corporation) shut down due to low gold prices. The 997 claim, 187 km2 property is located 55 km due east of Dawson City, accessible by paved and gravel roads from the junction of the North Klondike and Dempster Highways.
Golden Predator will pay $4 million in cash minus the value of a reclamation bond estimated at $795,000 and will issue 7.5 million shares to Alexco Resource. It will also issue 3.75 million share purchase warrants that entitle Alexco to buy shares at $1.15 for two years from closing.
Golden Predator has the largest controlled land position in the Yukon, with exploration holdings of more than 5,700 square kilometres.
