Gitennes sells Virgen property to Cambior

Montreal-based Cambior (CBJ-T) has acquired the Virgen property in Peru, along with other gold exploration concessions in the South American nation, through the purchase of a Peruvian company owned by Gitennes Exploration (GIT-T).

Situated 455 km north of Lima, the 2,800-ha Virgen property consists of nine concessions that straddle the Continental Divide. The altitude varies from 3,600 to 4,180 metres.

According to an independent estimate, the property’s Rio Suro zone has a measured and indicated resource of 3.6 million tonnes grading 1.77 grams gold, equivalent to 204,900 contained ounces, whereas the inferred resource consists of 2.97 million tonnes grading 1.71 grams, or 163,000 contained ounces. The estimates are based on assay results from 20 surface diamond drill holes, 16 underground holes and 20 reverse-circulation holes. Data from surface trenching and underground panel samples were also considered in the calculation.

Cambior will pay Gitennes US$7 million in cash over two years, of which the latter has already received US$2.5 million. Should Cambior decide not to make subsequent payments, the option agreement would be terminated and the properties returned to Gitennes.

Also, Gitennes’ subsidiary, Castle Keep, will be entitled to participation payments if gold production exceeds 400,000 oz. The payments will be based on a 3.25% net smelter return royalty for gold and a 2% NSR for silver, as well as a 1% NSR for all other metals or minerals produced on the property. As soon as US$13 million in participation payments are made, the gold NSR reduces to 2% for the remainder of the mine life.

Shareholders of Gitennes voted 98.25% in favor of the Cambior deal.

Gitennes continues to explore the Azul property in Peru through a joint venture with Navigator Exploration (NVR-A).