Guinness to start drills as Acadia deal completed

As Guinness’s new president, Burton is being asked to repeat the success he achieved in an identical position with Atlantic Goldfields (COATS).

As reported (N.M., Jan 9/89), Atlantic received around $10 million for its stake in the huge Noxon silver deposit in Montana after the project was purchased by Noranda Minerals and Washington-based Montana Reserves. In a joint venture with Jascan Resources (TSE), Atlantic succeeded in outlining 142 million tons of grade 2.1 oz silver per ton and 0.78% copper before the project was sold.

In his new role, Burton plans to complete a $1.5 million flow- through financing for exploration on the New Brunswick prospects which were picked up in the Guinness deal. This week, drills were scheduled to be turning on the Nepesiguit base metals-silver prospect near Brunswick Mining and Smelting’s No 12 mine.

Under that Guinness agreement, Acadia received $336,000 cash on closing and it will also get three additional $100,000 payments at 8-month intervals. The payments are secured by a letter of credit.

Also, Acadia can earn back a 40% interest in any of the New Brunswick and Nova Scotia claims acquired by Guinness Gold from Acadia, following a positive feasibility study.

If Acadia doesn’t exercise its back-in right, interest in the properties is converted to a 10% net profits interest.

Other features of the Acadia/ Guinness deal include a cash payment to Acadia, equivalent to one- third (or a maximum $100,000) of Guinness’s net cash flow from operations.

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