Dynatec Agrees to Form Joint Venture with United Keno Hill
RICHMOND HILL, ONTARIO--Dynatec Corporation ("Dynatec") today
announced an Agreement with United Keno Hill Mines Limited
("United Keno") to form a joint venture to rehabilitate, develop
and operate the mines and mill of United Keno located in the Elsa
area in central Yukon.
The Agreement provides for the parties to enter into definitive
agreements including a Joint Venture Agreement which will detail
the operation of the joint venture and provide for Dynatec to
serve as Operator. Dynatec has agreed to provide or arrange 50%
of the $22 million in pre-production and working capital and
equipment estimated to be necessary to re-commence commercial
production from the Elsa Properties and will assist United Keno
in securing the balance. In recognition of that assistance,
Dynatec is to be granted options to purchase shares of United Keno
pursuant to an option agreement. As part of its commitment,
Dynatec will subscribe for common shares of United Keno for an
aggregate subscription price of $1.5 million. As part of its
commitment, United Keno has agreed to arrange for subscriptions of
commons shares of United Keno of a like amount. The proposed
transactions are subject to satisfaction of certain conditions
including obtaining regulatory approval.
The Joint Venture Agreement will contain provisions for the
recovery by each company of capital contributions and for
Dynatec's participation in the profits of the joint venture. That
participation will be affected by production efficiencies and
costs and by overall profitability of the joint venture.
United Keno owns numerous underground and open pit mines in the
vicinity of Elsa, Yukon, where its milling, mining and industrial
facilities are located. These Elsa properties have produced more
than 200 million ounces of silver since 1914. New mining and
development techniques will permit substantial reductions in
mining costs and increase production efficiencies. A Production
License permitting commercial production from the Elsa properties
was issued to United Keno in January of this year.
W. Robert Dengler, President and Chief Executive Officer of
Dynatec, said, "We are pleased to be involved with United Keno on
this joint venture. We anticipate that commercial production could
resume late in 1998."
Dynatec Corporation is a widely held Canadian public company that
provides a broad range of services, principally to mineral and
refining companies in North America and around the world. Dynatec
operates through three divisions: mining services, drilling
services and metallurgical technologies. Dynatec is listed on The
Toronto Stock Exchange and the Montreal Exchange under the symbol
"DY".
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FOR FURTHER INFORMATION PLEASE CONTACT:
Dynatec Corporation
Penny Lipsett
(416) 364-0107
(905) 780-1980
www.dynatec.ca
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