An amended letter of agreement has been signed by Monk Gold Resources (TSE) and Sikaman Gold Resources (TSE) which allows the former to earn a 37.5% interest in the Sol Wood mine and a half interest in the Seneca property in California.
Under the agreement, Sikaman will receive 1.4 million warrants which are convertible into Monk common shares and payments totaling $250,000. Monk is required to carry out the first $500,000 worth of exploration and development on Seneca by Aug. 31, 1994.
The revised agreement will scale down Monk’s capital requirements in 1993 to $400,000 from $1 million.
Sol Wood, with gold reserves of 23,000 oz., recently reopened after a seasonal closing. It is expected to produce about 2,000 oz. per month at an average cash operating cost of US$120 per oz.
Once reserves are depleted there, operations will begin at Seneca which contains an estimated 225,000 oz. gold. Seneca is scheduled to produce about 25,000 oz. at an average cash operating cost of US$165 per oz. The partners also announced that the Cerro Mayal mine in Argentina will begin operating in September at an annual rate of 28,000 oz., rising to 57,000 oz. in 1994.
In early September, bulk-sampling and drilling are to begin on Sikaman’s other Argentine gold project, known as Neuquen River.
Earlier this year, Monk was reorganized with John Butt, a former environment minister of the Newfoundland government, appointed president and former premier Brian Peckford named a director.
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