Madsen Gold buys Dona Lake site

The Dona Lake mine site near Pickle Lake, Ont., has been sold.

Madsen Gold (TSE) is buying the operation (excluding headframe and underground workings) for $816,000.

Current owners Ross Finlay (85%) and Societe Miniere Ecudor (15%) have been paid $300,000 and will receive $50,000 per month until June, 1995. The balance will be paid before August, 1995.

Madsen has also arranged a private placement of 390,000 common shares and an equal number of common share purchase warrants. Four purchase warrants and an additional $1.80 will entitle the holder to buy one Madsen common share until May 11, 1996. Proceeds of $592,000 will be used to finance the acquisition of the Dona Lake mill and other facilities.

Meanwhile, Madsen is rehabilitating the past-producing Madsen gold mine near Red Lake, Ont., where proven and probable reserves stand at 832,900 tons averaging 0.29 oz. gold per ton.