A financing package that would have seen Golden Knight Resources (TSE) purchase one million shares of Plexus Resources (TSE) at $3 each has been terminated. It was contingent upon the latter’s Rawhide gold project beginning construction in 1988 which hasn’t happened.
In any event, Plexus will still issue 290,670 common shares by way of a private placement to Golden Knight for $250,000 cash and for repayment of $258,673 in principle and interest previously advanced to Plexus under the May 1988 agreement.
The financing fell apart because Plexus was unable to secure an agreement with the property owner of the Rawhide project which is located 120 miles southeast of Reno, Nev.
Plexus is to receive from a joint venture partner 24.01% of the project’s net proceeds for providing 49% of construction and ongoing operating expense to the joint venture partner. The current mine plan foresees a 15-year mine life and annual gold production of 81,000 oz for the first 10 years.
“Construction of this project has been delayed for more than two years while the lessee has attempted to have the property owner consent to assign the lease but not the property to a joint venture established for development of the mine,” said Plexus.
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