Lencourt acquiring interest in Alaska asbestos deposits

Junior-mining firm Lencourt Ltd. has signed an agreement to acquire a 50% working interest in the Slate Creek chrysotile asbestos deposits in Alaska from Tanana Asbestos Corp. along with a royalty interest from Tanana’s parent, Doyon Ltd.

Consideration for the acquisition is 125,000 common shar es of Lencourt plus future production payments equal to 2.5% of net income before payout and 10% of net income after payout, subject to certain minimum payments after start-up.

Lencourt, whose interest in the project will be held through a wholly- owned Alaskan subsidiary, says it does not plan an early resumption of development activities.

The other 50% interest in the Slate Creek deposits is owned by gco Minerals, a subsidiary of International Paper Co.

Lencourt’s 50% interest may be increased by 5% by exercise of an option at the time of a production decision to back-in at a cost of 10% of prior exploration and development costs. A similar option is owned by Watts, Griffis and McOuat Inc. (a consulting firm which controls Lencourt) which, if exercised, would mean Lencourt’s interest would rise only to 52.5%.

The Slate Creek deposits, Lencourt reports, contain drill-indicated reserves of about 60 million tons estimated to contain more than 11% asbestos fibre. The company calculates it purchased its 50% interest for less than 1 cents per ton of reserves.

The deposits are located about 170 miles east of Fairbanks, near the Yukon border, and rest in a geological environment similar to that of the Clinton Creek asbestos deposit 50 miles to the east.

More than $15 million(US) was spent on exploration of the Slate Creek deposits between 1977 and 1983. Lencourt envisages an open- pit operation and production of 100,000 tons or more of fibre annually.

Meanwhile, Lencourt is reviewing a feasibility study dealing with the recovery of silver from mine tailings in the Gowganda area of northern Ontario. Lencourt has an option to acquire the tailings, estimated to contain 1.5 million oz silver. Cost of bringing the operation into production is projected to be $5 million.