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Post by Franko10 ™ on Oct 9, 2004 18:48:27 GMT -5
Forest Gate Subsidiary To Acquire Caribou Mines
via COMTEX
October 8, 2004
SHARES OUTSTANDING: 25 MILLION
SYMBOL & EXCHANGE: FGT-V
MONTREAL, Oct 08, 2004 (Canada NewsWire via COMTEX) --
Forest Gate Resources Inc. announces it has signed a Letter of Intent to acquire the Caribou and Restigouche Mines (the "Mines") from Breakwater Resources Ltd., Toronto.
To undertake the acquisition, Forest Gate has formed a wholly owned subsidiary, Blue Note Metals Inc. It is Forest Gate's intention to transfer its existing New Brunswick mineral properties to Blue Note Metals and to have Blue Note complete the acquisition of the Mines. The existing New Brunswick properties are the California Lake silver property, Rio Road gold property and the Canoe Landing Lake polymetallic deposit.
Once this is completed, it is Forest Gate's intention to spin out Blue Note Metals by way of a plan of arrangement under the Canada Business Corporations Act and consequently list Blue Note as a separate entity on the TSX Venture Exchange.
This proposed transaction, which is subject to shareholder and regulatory approval, will give Forest Gate shareholders shares in a separate public company that will own the Mines and the New Brunswick exploration properties.
Under the terms of the Letter of Intent, Blue Note Metals will pay Breakwater Resources Ltd. 600,000 treasury shares and assume Breakwater's obligations under several existing agreements. Blue Note will also become responsible for the environmental reclamation of the Mines.
Blue Note Metals has a period of 60 days to conduct due diligence on the Mines and a subsequent 45 day period to close the transaction.
In addition to the two Mine sites, the acquisition includes associated infrastructure as well as a number of exploration claims in the vicinity of the Mines. The Caribou Mine site is located 50 km west of Bathurst, New Brunswick and includes an underground mine currently being kept under care and maintenance, a 3000-tonne per day concentrator and a permitted tailings facility.
The Restigouche Mine site, located 30 km further west, includes an open pit mine and associated infrastructure and is also currently under care and maintenance. Potential exists to expand mineral resources at the Caribou Mine site, which has not been drilled at depth or along strike. The associated exploration claims are also believed to have good potential.
Past efforts to operate the Mines were hindered by inferior metallurgical performance and poor economic conditions. With the implementation of a number of process changes arising from extensive metallurgical research and development work and the implementation of a number of design and equipment changes in the concentrator, metal recoveries are expected to be in line with those achieved by other base metal mining operations in the Bathurst Camp. It is anticipated that the Mines will produce three separate concentrates: lead, zinc and copper with significant gold and silver byproduct credits being distributed amongst the three concentrates.
None of the concentrates is expected to contain significant levels of penalty elements. Concentrates will be able to be marketed domestically or shipped offshore through the deep-water port at Belledune located 75 km from the Caribou Mine site.
It is expected that production will be resumed 6-9 months after the company makes a decision to resume operations and that full production capacity can be reached in 12-15 months. During the pre-operating period, mine development and rehabilitation will be carried out and the required process and equipment changes will be implemented in the concentrator to permit the Mines to achieve full production capacity.
Based on data gathered as part of a Re-Opening Plan completed in 2000, capital spending of $32 to $35 million, including working capital, will be required over the mine life with $12-15 million needed prior to the resumption of operations. Operating costs are expected to be $42-44 per tonne of ore milled.
The Caribou massive sulphide deposit was first discovered by Anaconda in 1955. From 1965 to 1974, Anaconda mined copper from the deposit. In 1982, a silver/gold heap leach plant was constructed to process 60,000 tonnes of gossan materials. Breakwater Resources Inc. acquired the mine in 1986.
Blue Note Metals has hired John Martin as President. Martin was Breakwater's Mine Manager at Caribou from 1999 to 2001. Martin says, "I believe we have solved the metallurgical challenges that previously resulted in low recoveries and we have completed the preliminary engineering to correct the mill operating problems."
"Not only do we have a Mine Re-Opening Plan that I am comfortable with but we are expecting infinitely better metals markets," said Martin. "The previous re-opening was largely the casualty of horrible market timing. The profitability of Caribou is intimately tied to commodity prices."
"Following this transaction and the spin out of Blue Note Metals, Forest Gate will be a pure Canadian diamond exploration company," said Michael Judson, President of Forest Gate Resources Inc. and Chairman of Blue Note Metals Inc. "The Caribou opportunity is simply too great to pass up. But as it cannot exist in the Forest Gate realm, it is felt Forest Gate and its shareholders are best served by spinning it out. Forest Gate's focus is and will continue to be Canadian diamond exploration."
"It is a win-win event for Forest Gate shareholders. They continue to own their exposure to a highly promising diamond play and they also become shareholders of a company that owns a zinc-lead-copper mine that could be cash-flowing inside of 24 months," Judson said.
"The metals market, driven by the growing Asian economies and a rapidly tightening supply situation, is poised to grow significantly over the next few years. We have positioned our shareholders to be able to take full advantage of that opportunity." Said Judson.
This press release has been edited and reviewed by John Martin, professional engineer and Qualified Person.
Forest Gate is a publicly traded mineral exploration company with diamond properties in Saskatchewan and precious and base metal properties in New Brunswick. The company's shares and warrants trade under the symbol FGT on the TSX Venture Exchange.
Forward-Looking Statements
This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws that involve risks and uncertainties. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ materially from expectations include the effects of general economic conditions, actions by government authorities, uncertainties associated with contract negotiations, additional financing requirements, market acceptance of the Company's products and competitive pressures. These factors and others are more fully discussed in Company filings with Canadian securities regulatory authorities.
The TSX Venture Exchange has not reviewed nor does it accept responsibility for the adequacy or accuracy of this news release.
VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION: www.newswire.ca/en/releases/orgDisplay.cgi?okey=18055
For further information: PLEASE CONTACT: MICHAEL JUDSON, PRESIDENT & CEO, TOLL FREE: 866-666-3040, mjudson(at)forestgate.ca, www.forestgate.ca News release via Canada NewsWire, Toronto 416-863-9350
Copyright (C) 2004 CNW, All rights reserved
via COMTEX
October 8, 2004
SHARES OUTSTANDING: 25 MILLION
SYMBOL & EXCHANGE: FGT-V
MONTREAL, Oct 08, 2004 (Canada NewsWire via COMTEX) --
Forest Gate Resources Inc. announces it has signed a Letter of Intent to acquire the Caribou and Restigouche Mines (the "Mines") from Breakwater Resources Ltd., Toronto.
To undertake the acquisition, Forest Gate has formed a wholly owned subsidiary, Blue Note Metals Inc. It is Forest Gate's intention to transfer its existing New Brunswick mineral properties to Blue Note Metals and to have Blue Note complete the acquisition of the Mines. The existing New Brunswick properties are the California Lake silver property, Rio Road gold property and the Canoe Landing Lake polymetallic deposit.
Once this is completed, it is Forest Gate's intention to spin out Blue Note Metals by way of a plan of arrangement under the Canada Business Corporations Act and consequently list Blue Note as a separate entity on the TSX Venture Exchange.
This proposed transaction, which is subject to shareholder and regulatory approval, will give Forest Gate shareholders shares in a separate public company that will own the Mines and the New Brunswick exploration properties.
Under the terms of the Letter of Intent, Blue Note Metals will pay Breakwater Resources Ltd. 600,000 treasury shares and assume Breakwater's obligations under several existing agreements. Blue Note will also become responsible for the environmental reclamation of the Mines.
Blue Note Metals has a period of 60 days to conduct due diligence on the Mines and a subsequent 45 day period to close the transaction.
In addition to the two Mine sites, the acquisition includes associated infrastructure as well as a number of exploration claims in the vicinity of the Mines. The Caribou Mine site is located 50 km west of Bathurst, New Brunswick and includes an underground mine currently being kept under care and maintenance, a 3000-tonne per day concentrator and a permitted tailings facility.
The Restigouche Mine site, located 30 km further west, includes an open pit mine and associated infrastructure and is also currently under care and maintenance. Potential exists to expand mineral resources at the Caribou Mine site, which has not been drilled at depth or along strike. The associated exploration claims are also believed to have good potential.
Past efforts to operate the Mines were hindered by inferior metallurgical performance and poor economic conditions. With the implementation of a number of process changes arising from extensive metallurgical research and development work and the implementation of a number of design and equipment changes in the concentrator, metal recoveries are expected to be in line with those achieved by other base metal mining operations in the Bathurst Camp. It is anticipated that the Mines will produce three separate concentrates: lead, zinc and copper with significant gold and silver byproduct credits being distributed amongst the three concentrates.
None of the concentrates is expected to contain significant levels of penalty elements. Concentrates will be able to be marketed domestically or shipped offshore through the deep-water port at Belledune located 75 km from the Caribou Mine site.
It is expected that production will be resumed 6-9 months after the company makes a decision to resume operations and that full production capacity can be reached in 12-15 months. During the pre-operating period, mine development and rehabilitation will be carried out and the required process and equipment changes will be implemented in the concentrator to permit the Mines to achieve full production capacity.
Based on data gathered as part of a Re-Opening Plan completed in 2000, capital spending of $32 to $35 million, including working capital, will be required over the mine life with $12-15 million needed prior to the resumption of operations. Operating costs are expected to be $42-44 per tonne of ore milled.
The Caribou massive sulphide deposit was first discovered by Anaconda in 1955. From 1965 to 1974, Anaconda mined copper from the deposit. In 1982, a silver/gold heap leach plant was constructed to process 60,000 tonnes of gossan materials. Breakwater Resources Inc. acquired the mine in 1986.
Blue Note Metals has hired John Martin as President. Martin was Breakwater's Mine Manager at Caribou from 1999 to 2001. Martin says, "I believe we have solved the metallurgical challenges that previously resulted in low recoveries and we have completed the preliminary engineering to correct the mill operating problems."
"Not only do we have a Mine Re-Opening Plan that I am comfortable with but we are expecting infinitely better metals markets," said Martin. "The previous re-opening was largely the casualty of horrible market timing. The profitability of Caribou is intimately tied to commodity prices."
"Following this transaction and the spin out of Blue Note Metals, Forest Gate will be a pure Canadian diamond exploration company," said Michael Judson, President of Forest Gate Resources Inc. and Chairman of Blue Note Metals Inc. "The Caribou opportunity is simply too great to pass up. But as it cannot exist in the Forest Gate realm, it is felt Forest Gate and its shareholders are best served by spinning it out. Forest Gate's focus is and will continue to be Canadian diamond exploration."
"It is a win-win event for Forest Gate shareholders. They continue to own their exposure to a highly promising diamond play and they also become shareholders of a company that owns a zinc-lead-copper mine that could be cash-flowing inside of 24 months," Judson said.
"The metals market, driven by the growing Asian economies and a rapidly tightening supply situation, is poised to grow significantly over the next few years. We have positioned our shareholders to be able to take full advantage of that opportunity." Said Judson.
This press release has been edited and reviewed by John Martin, professional engineer and Qualified Person.
Forest Gate is a publicly traded mineral exploration company with diamond properties in Saskatchewan and precious and base metal properties in New Brunswick. The company's shares and warrants trade under the symbol FGT on the TSX Venture Exchange.
Forward-Looking Statements
This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws that involve risks and uncertainties. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ materially from expectations include the effects of general economic conditions, actions by government authorities, uncertainties associated with contract negotiations, additional financing requirements, market acceptance of the Company's products and competitive pressures. These factors and others are more fully discussed in Company filings with Canadian securities regulatory authorities.
The TSX Venture Exchange has not reviewed nor does it accept responsibility for the adequacy or accuracy of this news release.
VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION: www.newswire.ca/en/releases/orgDisplay.cgi?okey=18055
For further information: PLEASE CONTACT: MICHAEL JUDSON, PRESIDENT & CEO, TOLL FREE: 866-666-3040, mjudson(at)forestgate.ca, www.forestgate.ca News release via Canada NewsWire, Toronto 416-863-9350
Copyright (C) 2004 CNW, All rights reserved
