Western Quebec purchases stake in mining projects

Western Quebec Mines has signed an agreement with one of its major shareholders, Valmag Inc., to purchase Valmag’s interest in two mineral properties known as the Shawkey and Shawkey South.

The Shawkey property, located in Dubuisson Twp., Que., is subject to a joint venture agreement with Sigma Mines. Sigma holds a 65% interest in the claims. The property, which adjoins the operating Kiena gold mine, is a former gold producer developed by two shafts. Valmag holds the remaining 35% interest. Sigma also has the right to earn a 60% interest in the Shawkey South property by spending $600,000 on exploration.

As part of the purchase terms, Western Quebec must maintain the interest currently held by Valmag in both properties by making its proportionate share of future exploration and development expenditures. Also, 50% of any operating profits will be received by Valmag after Western gets reimbursed of certain expenditures at a rate of 20% per year.

The company has also acquired an option to earn interest in four other properties in Quebec. By spending $3.6 million on exploration over a 4-year period and issuing 1.9 million common shares, Western can earn a 100% interest in three properties and 80% in the fourth. These projects include the Mine Ecole, which is adjacent to the Shawkey property.