International Minerals acquired the property by agreeing to pay the vendor US$10,000 per year and a 2.5% net smelter return royalty on future production. Also, a US$500,000 payment is due at the start of commercial production, and the royalty can be repurchased at any time for US$5 million.
To earn its own interest, Iamgold must spend US$2 million on exploration over five years. It can acquire a further 20% in return for funding and completing a bankable feasibility study in the following three years.
Geological mapping and geochemical sampling will be carried out in an attempt to follow up on work by previous explorers, who pulled as much as 3 grams per tonne from hand trenches.
The trenches were dug in a 14-sq.-km area of argillic alteration and leaching, with the two best averaging 2.2 grams over 12 metres and 0.6 gram over 132 metres.
(A 7-hole drill program failed to return much core, owing to poor ground conditions. Also, many were abandoned before reaching their targeted depths, so the results were similar to those found at surface. The deepest hole stopped at a down-hole depth of 162 metres.)
Drilling will begin in the second half of the year.
In addition, International Minerals is seeking funds for its Rio Blanco gold-silver property, also in Ecuador. The inferred resource there stands at 5 million tonnes averaging 5.5 grams gold and 42 grams silver per tonne.
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