ABM, Goldenbell unite, Jamestown improving

By purchasing all of the outstanding shares of holding company ABM Mining, Northgate recently acquired ABM’s 88% voting and 45% equity stake in ABM Gold Corp. which in turn owns 11.3 million shares or 58.4% of Goldenbell. ABM Gold and Goldenbell are both based in Vancouver.

ABM Gold’s main asset is a 32.5% stake in Vancouver-based Sonora Gold Corp. (TSE), operator of the Jamestown gold mine in California. ABM also holds a 15% net operating profits interest in the Jamestown mine which produced 97,000 oz gold last year at a cost of $292(US) per oz.

With production expected to stabilize this year at around 100,000 oz annually, Sonora is attempting to reduce its operating costs to around $250 per oz.

A $25-million investment by ABM in Goldenbell was expected to result in a production decision at the Pine Tree/Josephine gold property in California. But after a feasibility study was completed in 1986 subsequent cost evaluations (based on open pit mining methods and conventional milling techniques) indicate that the project isn’t economically viable.

In the fourth quarter of 1988, Goldenbell announced a $4.8-million write down in the value of its investment in Pine Tree.

Goldenbell shareholders will meet March 3 to vote on the proposed amalgamation in which they are scheduled to receive one Class A common share of ABM Gold for every three Goldenbell shares currently held.

If the proposed merger is approved, Northgate’s interest in ABM Gold will decline to 38% from 45% due to an increased number of outstanding ABM shares.

According to Northgate spokesman Gregory Bowes, operating costs at the Jamestown mine are expected to decrease as higher grade ore is recovered.

Last year, 2.1 million tons of ore grading 0.058 oz gold per ton was processed and recoveries during the year averaged 78%.

Ore is currently being extracted from Jamestown’s Harvard pit, one of six orebodies which lie within a 1/2 mile x 5 mile strip of land.

Total proven and probable reserves of 32.6 million tons grading 0.062 oz gold per ton makes Jamestown the third largest gold mine in California.

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