Doug Ashbury
Northern News Services

Yellowknife (Dec 17/99) - It sold for a song. In this case a tenner.

Under a deal involving three levels of government, Miramar Mining has completed the acquisition of Giant mine, it was announced Tuesday.

Miramar paid $10 for the 51-year-old mine.

"This is a good deal for everybody. If it was not a good deal for us, we would never have done it," Miramar spokesperson Brian Labadie said.

The company, which owns the Con mine, will also contribute $425,000 to the Giant mine reclamation security trust.

Miramar actually bought Giant mine's mineral assets, inventories and equipment from DIAND.

In the deal, DIAND briefly took control of the property from the interim receiver. It is believed DIAND had to first buy Giant mine so the $250 million in environmental liabilities could be severed from the property. Under the final deal, Miramar has no environmental liability related to previous Giant mine operations.

DIAND and the GNWT will each give Miramar about $200,000 a year for two years. The money is to be used for exploration at Giant and Con mines. Miramar will provide matching exploration funding up to $500,000 a year.

For its part, the City of Yellowknife pays Miramar $410,000 over two years for a block of Giant mine property.

The city will get the full Giant mine property taxes of $699,000 for the year 2000. In 2001, the amount will be lower because Miramar will be using less of the property.

Miramar plans to resume mining at Giant in the first quarter of 2000.

Annual gold production is estimated to be 130,000 ounces (100,000 ounces from Con and 30,000 ounces from Giant).

With Giant online, Miramar expects to lower its per ounce cash operating costs to $260 US per ounce of gold produced. For the three months ended Sept. 30, the latest quarter for which figures have been released, Con's cash costs were $269 US per ounce.

Miramar will work with DIAND and the GNWT to develop a long-term reclamation strategy which includes a reclamation security trust designed to offset future environmental clean-up costs. The trust will be funded from a royalty related to Giant ore processed. This royalty is "tied to the profitability of Giant's ore," Labadie said.

Under current market conditions, the royalty amount would be "nominal," he said.

Miramar Mining Corp. acquired Giant mine assets through its indirectly wholly owned subsidiary Miramar Giant Mine Ltd. Miramar Giant Mine Ltd. is owned by Miramar Mining Canada Ltd. which is owned by the Miramar Mining Corp.