Ashurst's golden stake in Ukraine Relay company acquires 25% of mining operation

March 26, 1997|By Ted Shelsby | Ted Shelsby,SUN STAFF

Ashurst Technology Ltd. yesterday reached an agreement with a Ukrainian company that will give the Relay-based technology company a 25 percent stake in what it called one of the most significant gold deposits in the world.

Under terms of the agreement with Ukrzoloto, a Ukrainian state company in Kiev, Ashurst will serve as a consultant and do finance feasibility studies related to the mining of gold from eight sites throughout Ukraine. The cost to Ashurst will be between $20 million and $30 million.

"This could have a significant impact on Ashurst," said Stephen Meldrum, a vice president of the Relay company.

Meldrum said early exploration indicates that there are about 19 million ounces of gold at the five mines, where some preliminary shafts have already been drilled.

The three other sites, which are less developed, have the potential for an additional 32 million ounces, according to the joint announcement by Ashurst and Ukrzoloto.

The agreement calls for the formation of a new company, Ukraine Gold International Ltd. Its board of directors will consist of Western and Ukrainian business leaders, with Benton H. Wilcoxon, chairman and chief executive of Ashurst, serving as co-chairman of the new company.

Meldrum said the feasibility studies will examine such things as ore resources and pre-production costs. "We will work our a mining plan, determine the rate of production and development costs."

He said that Ashurst will also determine plant sites, be involved in the planning of new roads and housing in towns near the gold production sites and training of workers.

Ashurst was founded in 1991 with the goal of refining technologies developed in the former Soviet Union, turning them into products and bringing them to the world market.

The company holds a 43 percent stake in the Zhovti Vody mine outside Kiev that was once a major harvesting ground for iron ore and uranium for the Soviet military.

The giant mine, with more than 200 miles of tunnels, is also the world's primary source of scandium, a rare metal known for its toughness and a "top secret" material used in Soviet fighter planes. Adding just traces of scandium to aluminum increases the weldability of the alloy.

Other benefits include increased strength, durability, plasticity and fatigue resistance.

In February, Ashurst licensed California-based Easton Sports Inc. to manufacture and market baseball and softball bats made from Ashurst's proprietary aluminum-scandium alloys.

The new Easton bats mark the first commercial use of aluminum-scandium structural alloys outside the former Soviet Union.

Pub Date: 3/26/97

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