Atlas Corporation Signs Letter of Intent with Brown & Root for Gold Bar Project

Strategic Insights -

Atlas Corporation has made significant moves in advancing its Gold Bar Project in Nevada, signing a letter of intent with Brown & Root for contract mining services and guaranteeing a portion of project financing. This development marks a crucial step in the project's progress, enabling Atlas to focus on the Doby George Gold Project, a near-term production gold property with an indicated reserve of approximately 220,000 ounces. Gary Davis, Atlas' President, expressed enthusiasm for the agreement, emphasizing its benefits for both companies and the potential for increased profitability.

Key Takeaways:

  • Atlas Corporation has signed a letter of intent with Brown & Root for contract mining services at the Gold Bar Project, establishing costs for the contract mining of the Gold Ridge and Gold Pick deposits.
  • The letter also provides for Brown & Root to guarantee a portion of project financing and receive a limited net profits interest in the project.
  • Definitive contract negotiations will be contingent upon Brown & Root's review of the economic assumptions for the project, an independent valuation of the Gold Bar properties, and Atlas' ability to enter into a hedging program to secure certain minimum cash flows.
  • The parties hope to execute a definitive agreement by November 30, 1995.
  • Atlas has closed on the purchase of the Doby George Gold Project from Independence Mining Company Inc. (IMC) for 1.4 million shares of Atlas' Common Stock and $400,000 in cash.
  • The Doby George Gold Project has an indicated reserve of approximately 220,000 ounces.
  • Gary Davis, Atlas' President, highlighted the benefits of the agreement, stating that it will enable Atlas to focus a larger portion of its financial resources on the development of the Doby George Gold Project.

Statistics:

  • 1.4 million shares of Atlas' Common Stock were delivered to Independence Mining Company Inc. as part payment for the Doby George Gold Project.
  • The cash component of the purchase price for the Doby George Gold Project was $400,000.
  • The indicated reserve for the Doby George Gold Project is approximately 220,000 ounces.
  • The letter of intent provides for Brown & Root to guarantee a portion of the project financing.
  • The parties hope to execute a definitive agreement by November 30, 1995.

Sources:

  • Atlas Corporation (PRNewswire, Nov. 6, 1995)
  • Brown & Root Inc. (Houston, Texas)
  • Independence Mining Company Inc. (IMC)
  • Atlas Corp. (NYSE: AZ)
  • Colorado