Joutel wins landmark Cuban approval

Finally, after months of speculation and anticipation, a landmark exploration agreement between Joutel Resources (TSE) and the Cuban government has been approved by the Cuban Council of Ministers.

The deal, the first of its kind for a North American exploration company, should pave the way for future mineral development in Cuba by foreign nationals.

Joutel’s agreement gives them the right to explore three mineral concessions — Santa Clara, Kamaguey and Sierra Maestra — in the central and eastern portions of the island.

The concessions, covering 1.2 million acres, will be leased from the government for about $50,000. Joutel will have up to four years to carry out regional exploration and prospecting; after that point, it will reduce its holdings to specific properties.

Development and exploitation of a deposit will be shared 50-50 with the Cuban government. Profits from operations will also be shared equally, with Joutel retaining the right to repatriate all of its profits and dividends. All of the areas are underlain by island arc volcanic terranes which have the potential to host volcanogenic massive sulphide mineralization, copper and/or copper-gold porphyry systems and epithermal gold deposits.

Each of the concessions contains a variety of mineral occurrences, and in the Santa Clara area several small deposits are known to exist. One such deposit, the San Antonio, contains 2.7 million tons at 1.64% copper and 3.64% zinc and 0.6 oz. silver per ton.

At the Arimao project, also in the Santa Clara area, the Cubans have identified a copper-gold porphyry system with preliminary reserves of 80 million tons grading 0.3% copper and 0.03 oz. gold.

Joutel President Charles Page told The Northern Miner that geological compilations for all the areas are almost complete and that more detailed exploration will be carried out this fall. The programs will include airborne geophysical surveys, geological mapping and diamond drilling. Initial drilling will be conducted on some of the existing and partially defined deposits and occurrences. Since many of the targets are already at the deposit stage, Page says he “expects to get results fairly quickly.” Toronto-listed Metall Mining signed a letter of intent with Joutel late last year, giving it the right to earn a 25% direct interest in one of Joutel’s polymetallic projects. Under the agreement, Metall must pay Joutel $150,000 and spend $1 million on exploration over four years. Metall’s project selection is expected to occur after Joutel has delineated specific target areas.

Page says the company is not looking for additional partners since the project is “too big an opportunity to give away at this point.” Having recently sold up to five million shares to a consortium of international investors, Page feels the company should be able to fund work on the project for at least two years. First-year expenditures are estimated at $1.5 million. Other Canadian juniors with deals pending in Cuba include Republic Goldfields (VSE), Holmer Gold Mines (ASE) and Miramar Mining (VSE).

A formal signing ceremony of the agreement will take place in Havana in early August.