A number of gold prospects on the Reg claims held by Skyline Gold (TSE) will be jointly explored by Skyline and Placer Dome (TSE) under the terms of a recent agreement between the two mining companies. Skyline released details of the agreement with Placer shortly after announcing plans to suspend mining operations this fall at its Johnny Mountain gold mine in the Iskut River region of northwestern British Columbia.
The companies plan to carry out jointly further exploration work on the Bronson Creek and Bonanza West gold prospects on the Reg claims. The area of interest, which excludes the immediate mine-site area, covers about 1,682 acres or about 11% of the Skyline’s Reg claims.
As part of the agreement, Placer bought 500,000 flow-through shares of Skyline (at $1) to fund an equal amount of exploration work in the current season.
Placer has the option to spend a further $3.5 million to earn a 60% interest over several years. At this point, the property covering the prospects would be transferred to a joint venture where Placer would be operator and 60% owner.
Placer also agreed to advance Skyline up to $3.4 million for working capital and bank debt servicing requirements. Advances will be secured by a debenture registered against Skyline’s assets.
On its own, Skyline intends to explore other gold targets found on its Reg claims. Should new reserves be outlined, Skyline would benefit from an access road into the Iskut camp, which is expected to be completed in the second half of 1991.
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