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 VANCOUVER, British Columbia, Sept. 20 /PRNewswire/ -- Giant Bay Resources Ltd. ("Giant Bay") of Vancouver, has reached an agreement in principle to acquire Montana Reserves Company ("MRC") of Spokane, Wash. MRC presently holds a 5 percent net proceeds royalty convertible to a full 45 percent participating interest in Montanore silver-copper mining property ("Montanore") located in the Cabinet Mountains, of Northwest Montana, near the Canadian, British Columbia-Alberta border and some 12 miles southeast of ASARCO'S Troy Mine.
 The Montanore property has current geological ore reserves of 142,155,000 tons at 2.10 ounces of silver and 0.78 percent (15.6 pounds) copper per ton. The mineralized ore body has not been closed off by drilling to date and there is a strong likelihood additional reserves will be added to the known deposit, as the last surface exploratory holes drilled were in ore. Since its discovery in late 1983, Noranda Minerals Inc. of Toronto, US Borax and Chemical Corp., and MRC, have spent in excess of US$150,000,000 on Montanore, in 57,000 feet of diamond drilling, 14,000 feet of underground access adits, permitting and other mine development.
 Montanore reserves compare very favorably with ASARCO's nearby Troy Mine, a strata-bound copper-silver deposit similar in nature to the type of mineralization at Montanore, which was brought into production in 1963 and produced at 8,5000 tons of ore per day grading 1.58 ounces of silver and 0.76 percent copper, from an original reserve of approximately 64,000,000 tons.
 The Montanore Property is presently owned by Noranda, subject to MRC's 5 percent Net Proceeds Royalty. MRC holds the right to convert to a 45 percent participating interest, by paying Noranda US$26,759,658 plus accrued interest on or before June 30, 1994. Upon acquisition of the 45 percent participating interest, MRC will be obliged to pay 45 percent of the future cost of developing the Montanore Property, estimated to be up to US$15,000,000 total (MRC 45 percent equals US$6,750,000) until delivery of the bankable feasibility study. It is anticipated the acquisition and development expenses will be funded through an international and national equity offering by Giant Bay.
 Giant Bay will acquire all the issued shares of MRC, subject to approval by the Toronto Stock Exchange and the shareholders of Giant Bay, completion of due diligence, the receipt of a favorable report on the Montanore Property by Watts, Griffis & McOuat, and MRC having total liabilities at closing of less than US$140,000. Giant Bay will issue common shares to shareholders of MRC, equal to 85 percent of the issued shares following acquisition, with the present shareholders of Giant Bay holding the remaining 15 percent of the issued shares. There are presently 20,540,825 issued shares of Giant Bay and warrants outstanding of 2,250,000. It is proposed to consolidate the issued shares on the basis of one new share for nine issued shares On this consolidation of shares, existing shareholders will have 2,282,313 free trading shares and the shareholders of MRC 14,349,712 shares. MRC shareholders have agreed that 20 percent of their new Giant Bay shares will be non- tradable for one year and the remaining 80 percent of these shares will be held in escrow until a bankable feasibility study of the Montanore project is complete or the TSE agrees to release their shares.
 The principal shareholders of MRC are Frank D. Duval, Harry F. Magnuson and Gary L Hebener, who are all senior mining executives from the Northwestern United States.
 On June 10, 1993, Giant Bay completed the sale of its remaining 40 percent of the property development in Malaysia. Management has designated its cash reserves of approximately $1,800,000 to full participation in the Montanore Mine Project and the raising of further capital requirements.
 -0- 9/20/93
 /CONTACT: Catherine Stauber, Corporate Secretary, 604-685-8880/

CO: Giant Bay Resources Ltd.; Montana Reserves Co. ST: British Columbia, Washington IN: MNG SU: TNM

JB -- LA024 -- 3707 09/20/93 13:23 EDT
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Publication:PR Newswire
Date:Sep 20, 1993

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