Pegasus Attempts To Buy Remaining Zapopan Stake

Spokane-based Pegasus Gold Corp. said Tuesday that it will try to raise nearly $100 million to make one of the largest investments in the company’s history.

Pegasus financial advisors are looking to come up with $99 million to buy out the remaining interest in Zapopan N.L., which owns 42 percent of the Mount Todd gold mine in Australia.

Pegasus owns the other 58 percent of Mount Todd, and wants to own all of it. Mount Todd has 3.6 million ounces of gold and has become Pegasus’ largest gold property.

What encourages Pegasus even more is that the cash cost of producing an ounce of gold at Mount Todd was around $330 an ounce, one of the lowest costs of all Pegasus properties.

“We know the Mount Todd property well and have become increasingly comfortable with its fit in our asset base,” said Werner G. Nennecker, president and chief executive of Pegasus. “We view the property as an integral part of our long-term exploration strategy.”

Zapopan and Pegasus worked together to bring the mine into production last year. Heavy rains flooded the property in January of this year, slowing production temporarily, said John Pearson, director of investor relations for Pegasus.

Pearson would not comment on where Pegasus is looking to find the money to buy out Zapopan, but the effort is under way now, he said.

Both companies are constructing the second phase of Mount Todd, which, when completed in 1997, could increase the production to 300,000 ounces of gold, Pearson said.