The Crypto zinc deposit in Utah will undergo further exploration and development as the result of an agreement between Noble Peak Resources (ASE) and Cyprus Metals Exploration, a unit of Cyprus Minerals (NYSE). In return for a financial commitment of about $3 million over a 3-year period, Cyprus has the option to earn a 100% interest in the zinc-rich polymetallic deposit. Any mining revenues will be subject to a royalty of 2-6%, based on zinc prices.
Cyprus is also expected to produce a feasibility study establishing the existence of an economic orebody. Probable reserves, open along strike and downdip, currently stand at 11 million tons grading 6% (open pit oxide) and 9% zinc (underground).
If Cyprus does not commence production by the date specified in the study for reasons other than a drop in metal prices, Noble will be entitled to a standby royalty of US$100,000 per year.
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