Five months after launching financing negotiations, Australian-based Bolnisi Gold has suddenly withdrawn from the advanced Ocampo project of Gammon Lake Resources (GAM-T).
Under a 2002 agreement, Bolnisi was entitled to 60% stake in the Mexican project in return for developing an open-pit operation by March 2004, at a rate of not less than 1.25 million tonnes per year. The deal also required the feasibility study to be delivered by September 2003; otherwise monthly penalties of $100,000 would start accruing, exclusive of a monthly fee of $35,000 that the company had been paying since the deal’s inception.
As early as June, Bolnisi had reported to Gammon Lake that its review had advanced far enough to justify its ongoing participation. The company also said it had launched financing negotiations.
Gammon Lake will pay US$5 million to Bolnisi in return for the deal’s termination and all of its feasibility data.P>At last report, the Bolnisi concessions — Plaza de Gallos, Refugio, Conico, Picacho and La Estrella — were said to contain a total resource of 21.5 million tonnes averaging 1.29 grams gold and 50 grams silver per tonne. This excludes deep-lying material that Gammon Lake has been developing on its own.
In early 2002, Pincock Allen & Holt pegged the open-pit project’s internal rate of return at 139%, based on a gold price of US$300 per oz. and a silver price of US$4.60 per oz. The study also put Gammon’s share of gold-equivalent production at around 42,000 oz. per year over five years.
Gammon Lake’s shares tetter-tottered over the trading session, before settling at $6.60 by the day’s close, for an overall loss of 4. Just over 2 million shares changed hands, or 10 tens normal volumes, with the heaviest trading following the mid-day announcement.
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