McEwen faces old adversaries.$3M Lexam stake in VG Gold puts old foes at odds

Peter Koven, Financial Post Published: Thursday, July 23, 2009

In the tiny gold industry, it is only natural that old adversaries step on each other's toes once in a while. For entrepreneur Rob McEwen, his latest investment brings him into the neighbourhood of two of his foes, one former and one very current.

Yesterday, Mr. McEwen's company Lexam Explorations Inc. unveiled a $3-million investment in junior gold company VG Gold Corp., which is drilling its promising Paymaster property in the Timmins gold camp in Northern Ontario. The 100-year-old camp has received a lot of attention lately after it was revitalized through a discovery by Lake Shore Gold Corp.

"You might call it a renaissance going on there with Lake Shore and West Timmins [Mining] pulling up some nice grades. This particular property is in the midst of all that," Mr. McEwen said.

The deal is also interesting because VG's partner on the project is Goldcorp Inc., Mr. McEwen's former company. He built Goldcorp into an indust r y giant, but had a falling out with the company after it refused to hold a shareholder vote over its $7.5-billion acquisition of Glamis Gold Ltd.

Adding to the intrigue is the fact that Lake Shore is 40%-owned by Hochschild Mining PLC, a miner based in Peru. Hochschild has a separate joint venture with Mr. McEwen's company Minera Andes Inc., and it is not the friendliest of relationships.

"They're the partner from hell," is how Mr. McEwen puts it.

Continue reading at: http://www.financialpost.com/story.html?id=1818416
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