VAL D’OR, Que. It looks like McWATTERS MINING is gearing up to boost gold production. The company has bought out SOQUEM’s 40% of the Sigma-Lamaque complex and agreed to purchase 100% of BARRICK’s East Malartic mill.
McWatters intends to spend $36 million on the Sigma-Lamaque purchase. It will pay $22 million in cash and a maximum of $12 million in common shares to be paid and issued at closing and an additional $2 million in cash payable two years following closing. The deal is subject to financing and other usual conditions.
SOQUEM invested in the Sigma Lamaque complex in June 2002. Its participation allowed the plant, which had been closed since early 2001, to restart last November and hire 170 people. The full production rate of 5,000 tonnes/day will be achieved in the fourth quarter of 2003.
The East Malartic mill is located only 4 km from the East Amphi property. McWatters hopes to put the gold mine there back into production and process the ore at East Malartic (not at Kiena as previously announced). Between January and August 1999, East Amphi produced 22,230 oz Au. The most recent feasibility study indicates that underground mining of the deposit would produce 45,000 oz Au per year at an average cash operating cost of US$227/oz.
McWatters has issued a prospectus for an issue of common shares worth approximately $35 million. Barrick has subscribed to $5.8-million-worth of shares. Details can be found at www.mcwatters.com.