Abacus receives $2.5-million loan
Abacus Minerals Corporation AMC
Shares issued 22,815,405 Jun 23 close $0.17
Thu 24 Jun 99 News Release
Mr. Steve Todoruk reports
Abacus Minerals Corporation has received a $2.5-million (U.S.) long-term,
non-convertible, low-interest loan from the Economic and Development
Assistance Fund in Ketchikan, Alaska. These funds will be committed to a
$4.7-million (U.S.) exploration and development program at Abacus' Niblack
volcanogenic massive sulphide project on Prince of Wales Island in
southeast Alaska.
The exploration program at Niblack will allow for approximately 1,700
metres of underground exploration and 5,000 to 6,500 metres of underground
diamond drilling. The objectives of the program are to double the presently
indicated resource and demonstrate continuity prior to feasibility. The
drill-indicated resource at the Niblack project is 2.53 million tonnes
grading 3.04 grams per tonne gold, 38.99 g/t silver, 1.71 per cent copper
and 3.22 per cent zinc.
Within this resource, very high-grade copper, zinc and gold sections are
present. Examples of these rich grades encountered in drilling include
holes such as:
Hole Width Au Ag Cu Zn
m g/t g/t % %
LO-92 7.67 20.73 34.88 0.82 4.94
LO-97 9.20 9.99 204.52 1.39 25.80
LO-99 32.30 7.87 260.95 1.33 7.33
LO-115 15.50 3.01 36.25 4.20 1.27
Surface drilling at Niblack has followed the mineralization to depths where
it has become more economically feasible to drive an underground adit to
continue expanding the mineralized zone through underground drilling. The
company is confident that the deposit will significantly increase in size
with this next phase of development. It is anticipated that a
5.5-million-tonne resource will be sufficient to begin a prefeasibility
study at Niblack. Permits are in place to conduct the underground program.
Teck Corporation is the company's largest shareholder and has the right to
earn a 51-per-cent interest in the Niblack project by placing the property
into commercial production once a positive prefeasibility study has been
delivered.
The loan arranged through the EDAP will be amortized over a 20-year period
at an interest rate of prime plus 1 per cent. If the company can
demonstrate that an additional $7.5-million (U.S.) has been spent on the
property, the interest rate will be reduced to 3 per cent. The agreement
with the EDAP allows for no payments on principal or accrued interest until
the sixth year of the loan. Collateral on the loan will be backed with the
timber rights on the patented claims at the Niblack property. The company
is considering the negotiation of the early harvest and sale of select
areas of timber, thereby generating cash flow and supporting the loan's
pay-back process.
To meet the criteria set forth in the loan agreement with the EDAP, Abacus
has commenced negotiations to secure the remaining $2.2-million (U.S.)
required to finance the next stage of development at the Niblack project.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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