A letter of intent to purchase the East Kemptville tin mine in Nova Scotia from the banking group which provided the original financing for the project has been signed by Rio Algom of Toronto.
The tin mine was originally brought into production by Rio Algom in October, 1985, at a cost of $142.5 million, close to $30 million under
budget. Unfortunately, the world tin market collapsed shortly thereafter, and about a year later Rio Algom turned the mine over to the banking group.
Rio Algom continued to operate the mine, which towards the end of 1986 had a daily production rate of 9,000 tonnes ore grading about 0.2% tin.
The price of tin following the collapse was enough to cover operating costs at the mine but little else. The price of tin prior to the collapse was about $5.25(C) per lb; in late 1986, tin was selling in the $2.50-$2.60 range. The current price of tin is about $4.15.
Rio Algom spokesman Ken Culver said the acquisition is expected to be complete by the end of February, although he had no comment on the price being negotiated.
The banking group, Culver said, offered to sell the Yarmouth- area mine and Rio Algom tendered a bid. Completion of the acquisition is subject to finalization of a definitive agreement and obtaining necessary regulatory approvals, he said.
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