Amax Gold (NYSE) and Coral Gold (VSE) have extended the date of a proposed agreement relating to Coral’s Robertson heap leach gold property in north central Nevada. The completion date of the joint venture agreement allowing Amax to earn a 70% stake in the project was extended to Feb. 16 (from Feb. 1) to allow the Colorado company to sign all the necessary documents.
Under a proposed joint venture, Amax must spend US$11.5 million in a 4-phase exploration and development program, complete a bankable feasibility study and arrange project financing to earn its interest.
However, Amax’s project stake would be reduced to 60% if Coral elects to participate in development and production financing.
As the first $1 million to be spent on the project by Amax will be applied directly to exploration, Coral is limiting a previously announced private placement to $2 million from $3 million.
According to Coral, the mine produced 5,000 oz. gold and 7,000 oz. silver before mining stopped in the third quarter of 1989. However, heap leaching from stockpiled material is continuing.
“Advantages to Coral’s shareholders are obvious,” said Chairman Martin Greer in reference to the private placement. “The full amount of $3 million will still be available for Coral’s property enhancement and working capital, with less dilution of Coral’s equity at its present depressed share price.”
Coral Gold shares traded recently at $2.15 on the Vancouver exchange.
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