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Echo Bay declines ownership exchange.

Echo Bay declines ownership exchange

Echo Bay Mines has opted not to increase its stake in the Magino and Magnacon mines near Wawa. The company had planned to exchange its one-third ownership in Muscocho Explorations, Flanagan McAdam Resources and McNellen Resources, $10 million in cash and a $10-million loan facility for half interest in the Magino mine and a 37.5-per-cent interest in the Magnacon Mine.

Echo Bay would have operated both mines had the deal been completed.

Company officials blame reduced reserves, reduced ore grades and higher production costs at the mines for the decision.

Echo Bay chairman Robert Calman said ore-reserve grades at Magnacon declined 28 per cent, while the cost of mining per ton of ore increased 16 per cent. At Magino, the grade has dropped 17 per cent and costs have increased 16 per cent since last November.
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Title Annotation:Echo Bay Mines will not increase stake in Magnacon and Magino mines
Publication:Northern Ontario Business
Date:Jun 1, 1990
Words:142
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