Ekaton buys control of bentonite producer

A 75% equity interest in Saskatchewan-based Avonlea Mineral Industries has been acquired by Ekaton Industries (TSE), the latter company reports.

Ekaton says it will convert $600,000 of its $1.6-million loan to Avonlea into a 75% equity position and will make a nominal cash offer to acquire up to 100% of Avonlea’s remaining outstanding shares. The deal is subject to Avonlea shareholder approval.

Ekaton is developing a kaolin deposit at Wood Mountain, Sask. Kaolin is an industrial mineral used in the production of paper as both a filler and coater; it has other applications in the ceramic, paints and plastics industries.

Avonlea produces bentonite — an industrial mineral used in the oil well drilling industry, foundry industry and for agricultural and geotechnical purposes — at its processing plant located about 40 miles south of Regina, Sask. A producer of bentonite for more than eight years, Avonlea says it has about 25 years of mineable reserves.