Subject:
Stockwatch: United Keno Hill Mines Ltd - News Release
Date:
Thu, 11 Dec 1997 12:20:20 -0800
Agreement reached on merger
United Keno Hill Mines Ltd UKH
Shares issued 15,031,450 Dec 10 close $0.90
Thu 11 Dec 97 News Release
See NDU Resources Ltd (NDU) News Release
Mr James Stephen and Mr Stephen Powell report
Agreement has been reached on the terms of the proposed merger of the
respective companies, due diligence has been completed, and prior
conditions have been met. The previously announced agreement with Yukon
Gold and Mineral Development Company has been terminated and the parties
have waived the condition respecting NDU's financing activities. A binding
merger agreement is expected to be settled shortly, following which
shareholder, regulatory and other approvals will be sought.
The merger of the companies and the consolidation of their respective
property holdings in central Yukon will result in a company which enjoys a
base metal-hosted reserve and mineral resource inventory of over 70 million
ounces of silver. Combining NDU's properties, particularly the Marg and
Blende deposits with the United Keno properties and infrastructure at Elsa
will offer the operating synergies and capital efficiencies necessary to
permit the early resumption of commercial production of silver from the
United Keno properties and exploitation of NDU's Marg and Blende deposits.
United Keno's Elsa properties presently host geologic resources and
mineable reserves of 944,000 tons grading 30 ounces per ton silver, 4.8%
lead and 3.9% zinc. United Keno's Elsa properties have produced in excess
of 225,000,000 ounces of silver since production commenced in 1914 and less
than 25% of the favourable host horizon has been explored to date.
NDU's Marg deposit hosts a drill-indicated reserve of 6,092,000 tons at an
average grade of 1.76% copper, 2.46% lead, 4.60% zinc, 0.029 ounces per ton
gold and 1.8 ounces per ton silver. The Blende deposit hosts a
drill-indicated resource of 21,495,000 tons of open pittable material with
an average grade of 3.04% zinc, 2.79% lead and 1.6 ounces per ton silver.
Both deposits indicate potential for expanded tonnages and contain sections
of higher grade mineralization that could be mined soon after start up.
Plans call for the resumption of production at Elsa at an average rate of
500 tons per day. First year production is forecast at approximately
6,000,000 ounces of silver at an average cost of approximately US$3.00 per
ounce. Once production has been resumed, initial activities will
concentrate on further expansion of the mineral resources at Elsa, and then
on establishing the feasibility of the Marg deposit and the economics of a
new 2500 to 3000 tons per day mill to be constructed at Elsa. |
