Placer Dome options Vedron’s Timmins property

Toronto-based junior Vedron Gold (YVG-V) has finally closed last summer’s option agreement with Placer Dome (PDG-T).

Placer can earn a 51% interest in Vedron’s sole significant asset, its namesake property in Ontario’s Timmins camp, by spending $4.5 million on exploration and development over the next three years.

The Vedron property, which holds resources of 2.8 million tons grading 0.216 oz. gold per ton (614,092 contained ounces), is adjacent to the Dome mine, where Placer cranks out more than 320,000 oz. gold per year from open-pit and underground operations.

Once Placer has earned its 51% interest, the company may buy, and Vedron may sell, the remaining 49% interest for US$2 million, based on a buyout value of US$10 per oz.

After 200,000 oz. have been produced from two claims hosting Vedron’s Fuller deposit, the junior will receive royalty payments and, beyond that, Vedron will continue to retain a 2% net-smelter-return royalty on the 58-claim property.

Placer will also pay Vedron $10,000 per month in order to maintain the option agreement. The junior needs the money: as of Sept. 30, 2000, Vedron had a cash position of $13,615 and a deficit of $17.8 million.

Vedron shares were little-changed by the news of the option-agreement. The stock last traded at 4 in a 52-week trading range of 2-10.