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The property, which consists of 155 claims and 38 sq. km of fee land, hosts a gold deposit with a resource of 40.9 million tonnes grading 0.8 gram gold and 11.5 grams silver per tonne. Miramar submitted a plan of operations to the U.S. Bureau of Land Management in 1996. The BLM approved the plan, which would have seen Talapoosa developed as an open-pit and heap-leach operation.
Miramar closed the project in 1996 after metallurgical tests gave variable results, taking a $33.6-million writedown on its carrying value. Poor gold prices also played a part in Miramar’s decision.
Miramar’s wholly owned subsidiary, Talapoosa Mining, gets 575,000 shares of American Gold Capital and will receive a further 175,000 if American Gold Capital completes a positive feasibility study on the project, or if the property is resold for more than $2 million.
Miramar also retains a right to reacquire the property on “nominal” terms if American Gold Capital allows any of the claims to lapse. American Gold Capital can sell the property for less than $2 million only if it transfers its obligations to Miramar to the new owner. In addition, Miramar keeps responsibility for a re-seeding program and for closure of water-monitoring wells, though the purchaser can assume that obligation under the terms of the agreement.
The deposit consists of epithermal gold mineralization in a hydrothermal breccia zone in dacite flows and fragmental rocks of the Kate Peak formation. A near-surface oxide zone, called the Main zone, gives way at depth to a sulphide-mineralized body called the Bear Creek zone.
American Gold Capital, formerly known as Cascade Metals, raised $750,000 to finance work on the property, through private placements of 3 million shares that closed in February and April.
A technical report on the Talapoosa project, prepared in March 2002 by consulting firm Pincock Allen & Holt, recommended that US$350,000 worth of work be carried out on the site in two phases, culminating in 2,000 metres of core drilling.
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