A lawsuit between Habsburg Resources (VSE) and Timmins Nickel has been settled, paving the way for production to resume at the Dome Mountain gold mine near Smithers, B.C.
The settlement provides for Habsburg to become operator and allows it to increase its interest to 80% from 20%. In consideration for these provisions and the mutual release from all legal proceedings, Habsburg will issue 500,000 shares to Timmins Nickel.
A new joint venture agreement is to be completed by the end of this year. Under the proposed terms, Habsburg has the right to incur the first $750,000 of expenditures, after which each company will be required to fund exploration, development and operating costs in proportion to their respective interest.
The agreement may also include Habsburg’s exclusive option to buy all of Timmins Nickel’s interest in the property and the joint venture on terms yet to be negotiated.
Dome Mountain has an estimated 4-year reserve (assuming a mining rate of 250 tons per day) grading 0.41 oz. gold per ton. A capital budget and mine plan are being developed with a view to resuming production as soon as possible.
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