Blue Desert to merge with Burin Fluorspar
Blue Desert Mining Inc
BDE
Shares issued 8,847,565
1999-08-05 close $0.05
Thursday Aug 12 1999
Mr. Brian Fairbank reports
Blue Desert Mining and Burin Fluorspar Ltd. propose to merge the two
companies. Burin Fluorspar, an Alberta private company, holds a 100-per-cent
interest in Canada's most important fluorspar mine at St. Lawrence, Nfld. The
mine was operated continuously by Alcan Aluminium Ltd. between 1942 and
1977. Production by previous operators totalled 4.6 million tonnes of fluorspar
(CaF2).
Burin considers that the mine can be reopened profitably. Roscoe Postle
Associates has calculated measured and indicated reserves for the Blue Beach
North and Tarefare veins at 2,966,000 tonnes at 46.7 per cent CaF2 and
2,487,000 tonnes at 54.0 per cent CaF2, respectively. The ore zones at Blue
Beach and Tarefare are steeply dipping vein deposits varying in width from 3.4 to
16 metres. A preliminary mining study by BLM Bharti Engineering Inc., based on
a mineral reserve of 5,388,707 at 46.4 per cent CaF2, recommends a plan to
mine the Blue Beach North vein over an initial seven-year period, switching to the
Tarefare vein which would be mined over the subsequent five years producing
180,000 tonnes of 97.5 per cent fluorspar (CaF2) per year. Both operations
would employ long hole, open stoping methods. It is anticipated that all the
production can be sold at prices of $120 (U.S.) to $130 (U.S.) per tonne under
medium and long-term contracts. The government of Newfoundland has
committed $10-million of financial assistance toward the construction of a
deep-water port facility at St. Lawrence contingent on the results of continuing
feasibility studies and production financing. The Bharti report recommends
additional drilling and metallurgy work to bring the project to final feasibility stage.
Currently, a 7,000-metre drilling program is in progress which is designed to firm
up reserves. Fifteen holes have been completed at Blue Beach with an additional
10 holes to be drilled at Tarefare. Drilling shows that the Blue Beach vein
continues to greater depth than previously known suggesting that ore reserves will
be increased.
The development program calls for the capacity of the existing mill to be increased
from 85,000 to 180,000 tonnes of concentrate per year. Metallurgical tests will be
conducted on drill core to optimize the concentrator design. A heavy media
separation circuit will be added to improve efficiency. Previous operations
produced a high-quality concentrate on a consistent basis, therefore 97.5 per cent
CaF2 concentrate grade will be attainable.
Blue Desert Mining, a public company trading on the Alberta Stock Exchange,
owns a 100-per-cent interest in the Gobi, Mojave, Sahara, and West Point gold
projects in the Pogo area of Alaska, as well as other mineral exploration projects
in Nevada and Chile. Recently, a stream geochemistry program was completed on
the Alaska projects. Blue Desert expects to farm out the properties to prospective
joint venture partners.
To effect the merger, Blue Desert will consolidate its issued share capital on a 1
for 3 basis, and issue approximately 15.1 million postconsolidation shares on a 1
for 1 basis to the Burin shareholders as consideration for the purchase of all the
issued and outstanding Burin shares. Allowances are made to settle up to
$150,000 of Blue Desert indebtedness by issuing postconsolidated shares at a
deemed price of 50 cents per share. The merged company will be named Burin
Fluorspar Ltd., Canada Fluorspar Ltd., Burin Corp. or other such name to be
decided. Gordon Stollery will be chairman of the board of directors and Brian D.
Fairbank will be president and chief executive officer. Senior management in
Newfoundland includes Alex Harris, chief operating officer, Phonce Cooper, mine
manager and Norm Wilson, metallurgical engineer and mill superintendent.
The merger agreement is subject to approval by the shareholders of Blue Desert
Mining and Burin Fluorspar and by the appropriate regulatory authorities. Trading
in Blue Desert stock was halted Aug. 9, 1999, at the request of the company and
will remain halted until the transaction has been accepted by the Alberta Stock
Exchange.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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