A recent agreement with two junior companies sets the stage for Cheni Gold Mines (TSE) to begin a feasibility study and development plan to mine and mill the Mets gold deposit in the Toodoggone district of British Columbia.
Cheni currently owns and operates the Lawyers gold-silver mine in the Toodoggone camp; however, this operation is facing closure because of declining ore reserves.
The nearby Mets deposit, owned equally by Golden Rule Resources (TSE) and Manson Creek Resources (TSE), hosts preliminary reserves of 158,000 tons grading 0.33 oz. gold per ton. The Mets underground deposit sits about one mile from a road which can be used to truck ore to Cheni’s mill. The terms of the agreement allow Cheni to lease the Mets property in return for assuming all costs and liabilities for developing, mining and milling the deposit.
In return, Golden Rule and Manson will receive 10% of the bullion produced from the mining and milling of the first 75,000 tons, and 17% of the bullion produced from the mining and milling of all tons over 75,000 tons. As soon as permitting and weather conditions allow, Cheni intends to start its initial phase of underground exploration and evaluation of the Mets deposit. The company has one year to bring the project into production. If mining does not begin by this point, the lease will expire.
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