Jerome Gold buys reprieve as reserve hunt continues

Jerome and partner Muscocho Explorations (TSE) continue to work against the clock to prove up between 750,000 tons and one million tons by April so that Jerome can raise $2.5 million to buy the property from E.B. Eddy.

The forest products company recently agreed to extend the option deadline from December to April in return for a $100,000 cash payment. Jerome continues to pay the forest products company $25,000 per month to maintain its interest in the property.

If Muscocho doesn’t reach the target in time, E.B. Eddy has the right to buy its way back to a 40% interest or earn a hefty 10% net smelter return on production.

While operator Muscocho has spent about $2 million so far to earn a 50% interest (Muscocho’s interest is split three ways with affiliates McNellen Resources (VSE) and Chesbar Resources (TSE)), it is much too early to know whether or not the company can prove up the required tonnage.

With known reserves now standing at 437,320 tons grading 0.193 oz above the 500 ft level, Muscocho is currently driving crosscuts into the south zone.

From there it will establish a base for drilling into the Main zone where the joint venture expects to be able to prove up additional reserves. Exploration at Jerome will also entail some surface drilling, according to Jerome President Charles McAlpine.

A study conducted last April by consultants Derry, Michener, Booth and Wahl and a 350,000 ton bulk sample has given McAlpine good reason to believe that the Jerome zones extend and plunge. “That’s what we are going after,” he told The Northern Miner.

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