Mining giant Placer Dome (TSE) recently announced plans to exercise its option to purchase a block of ground adjacent to its Bald Mountain property in Nevada from USMX (NASDAQ).
The option covers USMX’s Top project area of the company’s Alligator Ridge property holdings.
The two companies entered an option agreement in 1991, giving Placer the right to purchase the ground for US$5 million by March 1. The funds will be paid at closing on Jan. 15.
Placer also has an option to purchase a second block of adjoining ground for a further US$6 million to March 1, 1994. There are no known reserves on the second block of ground, and in order to keep the option in good standing, Placer must commit to spend a minimum of US$500,000 by mid-February. At the time of the original agreement, USMX’s preliminary estimates put reserves at the Top project at about 1.9 million tons grading 0.08 oz. gold per ton.
John Haigh, spokesman for USMX, said Placer has drilled more than 180,000 ft. on the property since acquiring the option. The only figure Placer released is an estimate at the end of 1991 that the Top project area contains about 450,000 oz. gold, although no tonnage or grade figures were quoted. The purchase will not affect USMX production from its Alligator Ridge operations which was projected at about 50,000 oz. in 1992, dropping to about 40,000 oz. this year.
The purchase price will, however, further boost USMX’s financial position. At the end of last November, the company had about US$11.4 million in working capital and no long-term debt.
Haigh said the company is continuing to review potential resource acquisitions.
Be the first to comment on "Placer exercises USMX option"