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Deak buys 87-per-cent interest in Garrison, Thackeray properties.

Deak buys 87-per-cent interest in Garrison, Thackeray properties

Deak Resources Corporation's purchase of an interest in 106 claims north of Kirkland Lake is good for both parties, according to the seller.

"It's a good deal for both of us," said Babu Gajaria, president of Toronto-based Silverside Resources Inc. "Malcom Slack (chairman of Deak) is a very aggressive, astute man who wants to mine. And the property is ready for mining."

Deak purchased Silverside's 87.5-per-cent interest in the claims, located in Garrison and Thackeray townships, for $705,000. Deak made its first payment of $100,000 at the execution of the agreement. The balance will be paid in installments of $370,000 and $235,000 on Jan. 2 and March 31 respectively.

The remaining 12.5-per-cent interest is held by Lac Minerals and Perrex Resources Inc.

Andrew Taylor, secretary/treasurer of Deak, said the agreement ended a series of lengthy negotiations.

"We had been discussing the purchase for quite some time," Taylor said during a telephone interview from his Toronto office. He added that the company's decision to purchase the interest was made easier since Slack, until recently, had served as a director for Silverside.

Taylor noted that the company has offered Perrex Resources an opportunity to obtain 37 per cent of Deak's interest in the property. The Deak officer said Perrex can obtain the interest by matching Deak's cost.

The property has a mineral inventory of approximately 452,000 tons with an average grade of .145 ounces of gold per ton. Almost 10 per cent of the material, with a grade of .175 ounces, is available in a shallow open-pit mine.

Taylor said the company has plans to begin extracting the material immediately and transport it to its Kerr Mine in Virginia town for milling. The balance of the reserve will be accessed through underground developments from the open-pit and from another pit on the property.

"We plan to mine the open pit first and then begin the underground work," said Taylor, adding that the underground work would most likely begin in about six months.

The purchase is the latest in a series of acquisitions for Deak and GSR Mining which is 63-per-cent owned by Deak. The two completed the purchase of the Kerr Mine last spring. The mine was closed in 1989 following the bankruptcy of its former owner, Golden Shield Resources Ltd.

In August Deak received a $4-million loan from the Northern Ontario Heritage Fund Corporation for the refurbishing of the mill and the construction of a second mill circuit for base metals. The company plans to custom mill ore from northeastern Ontario and northwestern Quebec.


While Deak begins working the Kirkland Lake-area property, Gajaria said his company will begin searching for other properties to claim stake.

"Our main objective is to look at a number of opportunities in British Columbia, Quebec and Ontario," he said. "Our second objective is to get into some money-making properties for our stock holders."

The Silverside president said company officials will concentrate on existing geological data in their search for potential claims.

"We've found that using maps and research, and staking our own claims is the cheapest method of finding good properties," Gajaria said. "There is still a lot of room to find money-making properties."

Silverside still holds interests in claims in the Red Lake, Gowganda and Cobalt areas. The latter two properties have deposits of silver, while the Red Lake property has shown gold deposits with a grade of 1.95 ounces per ton.

Plans to act on the silver properties have been put on hold until prices climb to between $8 and $9 per ounce. Gajaria said the prospects for such a climb are good, considering the potential for rapid industrialization in Eastern Europe and Asia.
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Title Annotation:Deak Resources Corp.
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Nov 1, 1990
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