Doug Ashbury
Northern News Services

Yellowknife (Jan 31/00) - Kit Resources, which controls one of Nunavut's more advanced gold properties, is merging with Toronto-based Wheaton River Minerals.

Last week, directors of the two companies approved the merger. Kit Resources owns 100 per cent of the George Lake gold project, just south of Bathurst Inlet in the Kitikmeot.

Under the plan, Kit shareholders will get .408 shares in the merged company that will retain the name Wheaton River Minerals. The merged company will have about 52 million shares outstanding. Regulatory and court approvals of the merger are pending.

"Ideally, we would have liked to carry (George Lake) through ourselves to building and operating but market conditions precluded that possibility," said Bob Gilroy, Kit Resources' president and chief operating officer. Gilroy will become Wheaton's vice-president of special operations.

"Under the circumstances, we're pleased with the deal," he said.

The George project is optioned to Kinross Gold Corp. Kinross can earn up to 70 per cent interest in the project by spending $20 million on exploration over the next five years. Kinross is expected to have people at the George Lake property, located 100 kilometres south of Bathurst Inlet, this March as well as in the summer for exploration work.

If Kinross does not spend the required amount, the property reverts back to Wheaton River.

"They're (Kinross) taking care of exploration at a time when it's just about impossible for junior (mining companies) to raise money," Gilroy said last Thursday.

MRDI Canada estimates George has an inferred and indicated resource of two million ounces of gold.

The Kit Resources-Wheaton River announcement comes as production at Wheaton River's Golden Bear mine in British Columbia is in its final stage. The Golden Bear mine, operated seasonally, only has two more years of profitable life.