A lease agreement held by Cornucopia Resources has been renegotiated, the company says. The agreement concerns the Red Mountain gold deposit in Colorado.
Under the new deal, Cornucopia will receive a minimum 85% of any net profits from the project until all capital costs are recovered. Also, the company has become a 50% owner of the property and does not have to make additional property expenditures of $3.5 million(US) to earn its interest, as required by the previous agreement.
Finally, any future holding costs, payable if the property is not placed into production, will consist of advance royalty payments, recovery of which by Cornucopia will be made via future gold production.
Reserves at the property are calculated at 12.4 million tons grading 0.027 oz gold per ton and 0.79 oz silver. The stripping ratio is 0.6 tons of waste for each ton of ore.
An engineering study suggests capital costs for placing the property into production are $11.2 million(US) and cash operating costs at $203(US) per oz of gold. Envisaged as a heap leach facility, the mine will have an operating period of five months per year, Cornucopia says.
Current work includes metallurgical studies and additional exploration drilling designed to improve the economics of the project. If this work is positive, mining could begin in 1988, the company says.
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