Anglogold eyes property in Red Lake gold camp

A letter-of-intent agreement paves the way for Anglogold (AU-N) to earn from Rubicon Minerals (RMX-V) a majority interest in more than 20,000 ha in the Red Lake mining camp of northern Ontario.

To earn a 60% interest, Anglogold must spend US$3 million over the next five years. An additional 10% can be acquired in return for US$250,000 in cash.

Rubicon will manage the project during the first two years or until US$1 million has been spent, whichever comes first. Anglogold is committed to funding US$300,000 in the first year of the arrangement.

The Red Lake project hosts several showings and prospects, many of which occur in a 2.5-by-1-km corridor named Dorion-McCuaig. The corridor is part of a regional structure in which several deposits formed, including the producing Campbell mine of Placer Dome (PDG-T). The deal is subject to due diligence and completion of a definitive agreement.