Golden Star Resources (GSR-X) has decided to sell its Eagle Mountain gold property to the operators of the Omai gold project, also in Guyana.
Ownership of the Omai project is divided between Cambior (CBJ-T) with 65%, Golden Star with 30%, and the government of Guyana with the remainder.
The operating company, Omai Gold Mines, will pay Golden Star US$80,000 and convert the exploration permit into a mining lease. In addition, Golden Star will receive a US$3.7-million interest-free loan.
“The Eagle Mountain joint venture is an example of how an exploration company can strengthen its balance sheet even in poor times,” says Rick Winters, Golden Star’s vice-president of corporate development.
Omai Gold Mines has agreed to fund all exploration and feasibility costs, and Golden Star will receive a 1.5% net smelter return royalty once commercial production is reached, as well as US$1 million at the end of each year of production for five years.
Situated 50 km southwest of the Omai operation, the Eagle Mountain project is seen as a potential source of saprolite feed for the Omai mill. The 52-sq. km property has been an important site of small-scale mining for more than a century, having cranked out in excess of 750,000 oz. gold.
Exploration at the site began in the 1940s, since which time four stacked, collapsed breccia zones have been identified over a strike length of 2,100 metres.
To date, Golden Star has outlined a resource of 4 million tonnes at 1.4 grams per tonne in the Kilroy zone; the resource is equivalent to 180,000 oz. The company believes the property has the potential to host 20 million tonnes of hardrock material and several million tonnes of saprolite.
Be the first to comment on "Golden Star vends Eagle Mtn"