Bull Run disputed cost overruns associated with the construction of the mine’s refractory ore processing mill. The dispute was resolved by Bull Run selling to Freeport its interest in the mill for $5.7 million(US). The company has also entered into a new agreement with Freeport covering the conduct of mining operations at the property. Bull Run and Freeport will also retain their respective interests in the mine of 40% and 60%.
Freeport has also agreed to process ore from the mine at a fixed cost of $97.74 per oz of gold produced plus the actual operating cost of the mill and heap leach operations.
Freeport has also agreed to provide a $2.5 million revolving credit facility which will cover Bull Run’s operating cash calls and tolling charges in excess of revenue until March 31, 1990. Another $5-million credit facility will be provided by Freeport to the joint venture to finance the pre-stripping of the South Sammy Creek deposit. Bull Run eliminated its debt to Elders Finance by using the proceeds from the sale of its mill interest. Elders in turn, cancelled outstanding warrants to buy 1.82 million Bull Run shares and a 10% net profits interest in the Big Springs mine.
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