Redcorp Ventures eyes Keno Hill project

Vancouver — Redcorp Ventures (RDV-T) has inked a $2.8-million deal to acquire the past-producing Keno Hill zinc-lead-silver property in the Yukon.

The announcement was made after insolvent United Keno Hill Mines (UKH-T) missed its deadline for debt restructuring. The lien holders will now apply to Yukon’s Supreme Court for approval of the agreement. They will propose that all payments under the purchase agreement be made to the court in trust for the creditors.

Between 1914 and 1989, the mine produced more than 200 million oz. silver from 5.3 million tons of ore. Renewed exploration and development work took place from 1992 to 1996 under the direction of United Keno Hill. In 1997, the company completed a feasibility study that pegged the measured and indicated resource at 741,000 tons grading 31.4 oz. silver per ton.

Redcorp has agreed to pay $1.7 million on the day the deal is completed, which is expected to be about seven months after the court gives its approval. Half of the initial payment will be made in cash; the other half, in either cash or stock. The remaining $1.1 million will be payable in cash, once production financing is arranged. Production must begin by the end of 2005 or an annual $100,000 fee will be charged to Redcorp until the full payment is made.

The agreement is subject to a satisfactory prefeasibility assessment and a due-diligence review, as well as court approval.

Redcorp has entered into talks with the Nacho Nyak Dun First Nation regarding land claims in the area. On completion of the purchase, Redcorp hopes to form a joint venture with the group to re-develop the property.