Vancouver-based Breckenridge Resources (BKD-V) is the latest foreign company to scale the wall into China’s burgeoning mining industry.
The company, in which Athabaska Gold Resources (AHB-T) holds a 29% interest, reached an agreement with China Baiyu Xingyuan Mining (CBXMC) and Hong Kong-based Norsang to develop the Xiacun silver-base metal deposit in Sichuan province.
Breckenridge will hold a 68% interest in the joint-venture company, called Baiyu Xin Bei Mineral, with CBXMC holding 25%, and Norsang the remainder.
CBXMC consists of a consortium that includes the government of Sichuan.
To advance the project to production, the partners must spend an initial US$34 million, of which Breckenridge will contribute US$23.1 million, Norsang US$2.4 million, and CBXMC (which financed previous exploration) US$8.5 million.
Breckenridge and Norsang will finance a feasibility study and construction.
A prefeasibility study outlined a mine-and-mill complex capable of producing 1,500 tonnes per day over a mine life of 15 years, based on current reserves.
The deposit is estimated to contain 8.2 million tonnes grading 225 grams silver and 0.61 gram gold per tonne, plus 9.15% zinc, 5.65% lead and 1.04% copper. The deal also includes provisions for exploration and development of other local resources.
The deal has yet to be approved by the Chinese government and the Vancouver Stock Exchange.
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