During the next six weeks, Cheni Gold Mines (TSE) intends to carry out its initial underground evaluation program on the Mets deposit, near its producing .TLawyers gold mine in the Toodoggone district of northern British Columbia.
The company recently executed a formal agreement allowing it to acquire the deposit from co-owners Golden Rule Resources (TSE) and Manson Creek Resources (TSE).
The agreement calls for Cheni to assume all costs and liabilities for developing, mining and milling the deposit, while Golden Rule and Manson Creek would receive 10% of the precious metals produced from the first 75,000 tons of reserves, and 17% of the bullion produced from any tonnage over this amount.
Ownership of the deposit will revert to the two juniors if Cheni has not mined and milled at least 10,000 tons by September, 1993.
Cheni has already received all the permits to begin its initial underground program, and has mobilized crew and equipment to the site from the Lawyers mine.
Once the $500,000 program is complete, Cheni will use the information concerning gold grade, continuity of the zone, mining conditions and environmental liabilities to determine if it will be feasible to exploit the deposit.
The company has already arranged financing to complete the project in the event a positive production decision is made.
A mining operation at Mets would allow Cheni to extend the life of its Lawyers mine project where minable reserves were found to be less than originally projected.
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