Belmoral and Roddy agree on former’s takeover bid

Agreement has been reached between Belmoral Mines of Toronto and Roddy Resources of Vancouver whereby Belmoral may acquire up to a 51% interest in Roddy, which operates a heap leach gold mine in Arizona.

The Bighorn heap leach operation is not currently producing but Belmoral says the mine is capable of turning out 1,000 oz gold per month. Belmoral President Steven Harapiak says that while the mining operation has had its troubles, including mining, metallurgical and financial, the problems are not insurmountable.

Under the agreement, the Bel moral investment will be in the form of a 3-year convertible debenture, with $2.3 million(US) being advanced at closing. An additional $2.2 million will be advanced, if required, during 1988 to repay Roddy’s remaining debt obligations. The debenture is convertible into Roddy shares at $2.04(C) per share.

Belmoral will manage the project and receive a 36-month option to acquire sufficient Roddy shares at $2.40(C) per share to provide Belmoral with a 51% equity interest. The company will also appoint three members to the 5-member Roddy board of directors.

The acquisition marks Belmoral’s entry into the U.S. gold-mining community. The Bighorn property currently hosts reserves of one million tons grading 0.06 oz gold per ton from one of four mineralized zones. Belmoral reports Roddy also has available an additional 6,500 contiguous acres. Exploration program

Belmoral says it plans to start an exploration and drilling program to expand reserves on the Bighorn property and to identify and evaluate the potential of the surrounding properties.

In other news, a $4-million placement involving flow-through shares has been arranged between Bel moral and cmp 1988 Resource Partnership and Co., Ltd.

The placement, subject to the approval of the Belmoral board and regulatory authorities, will result in the issuance of between 881,835 and 1,058,202 shares of Belmoral. The company says it intends to use the funds on exploration projects in northwestern Quebec and northeastern Ontario

In reference to a placement in 1987, Belmoral says it will not require the total requested for that year, which will result in a reduction of shares to be issued under that program by about 700,000 shares.

Belmoral, with two operating gold mines near Val d’Or, Que., recently announced a deal with Yorbeau Resources, whereby Bel moral will spend $10 million in exploration work on the junior- mining company’s Astoria gold property near Rouyn-Noranda, Que., and another $5 million for Yorbeau shares and warrants. Exercising all the warrants would give Belmoral more than a 50% interest in Yorbeau.