Pine Point mineral assets attracts potential buyer
Paul Bickford
Northern News Services
Monday, October 31, 2016
PINE POINT
A company has signed a letter of intent to buy the Pine Point mineral assets.
The Toronto-based Darnley Bay Resources Limited announced its plans on Oct. 20 to buy the Pine Point assets of Tamerlane Ventures Inc., which has been in receivership since 2013.
The Pine Point property, located between Hay River and Fort Resolution, consists of 42 separate lead-zinc deposits of varying size and grade.
"This acquisition is a game-changer for Darnley Bay and puts us on a clear path toward production," stated Jamie Levy, the company's president and chief executive officer, in a news release. "It is rare in the mining business that the opportunity to acquire an entire mining district presents itself."
The Pine Point property consists of a semi-contiguous group of 47 mineral claims and mining leases.
Darnley Bay intends to start preliminary economic analysis immediately upon closing.
The company has signed the binding letter of intent with KSV Kofman Inc., acting as the court-appointed receiver of Tamerlane Ventures Inc., and Pine Point Holding Corp.
Darnley Bay has agreed to pay an initial fee of $50,000 and issue 1,150,000 common shares to KSV for the option to purchase a 100 per cent interest in the property on condition of an additional payment of $2,950,000 on or before Jan. 22; and the issuance of an additional 23,850,000 common shares of Darnley Bay on or before that date.
Darnley Bay intends to obtain a minimum of $5 million in financing, partly to make the transaction payment.
"The goal would be to get Pine Point back into production," Levy said.
However, he cautioned that the process is only at the stage of a letter of intent, and Darnley Bay doesn't yet own the project.
"I don't know what's a fair comparison but you can't really live in a house until you buy it," he said. "Right now we have an offer to buy the project."
Levy sounds optimistic about Pine Point.
"Ideally, we want to get this," he said. "We think it's a very good asset and I think it's been overlooked for many years."
Levy noted that many analysts are saying that zinc is going into a bit of deficit, and that potential reduction in supply would cause an increase in prices.
Pine Point produced about 70 per zinc and 30 per cent lead.
If a sale is successfully concluded, Levy said he would come North to consult with First Nations and the GNWT, and hold meetings in Hay River.
Mayor Brad Mapes welcomes the interest in Pine Point.
"It's a good news story when we see that somebody is showing some interest to buy the property," he said
Mapes said, if the property ever did get back into operation, it would have a "huge impact" on Hay River.
"I don't think you'll ever see Pine Point mines as big as what it was in the heydays, but any kind of a creation of a mine over there will be a great thing for the community," he said.
The previous Pine Point Mine was operated by Cominco from 1964 to 1988.
When the mine closed, the community of Pine Point was also shut down.
