Dome Mountain back on track to production

The over-all agreement, which gives Teeshin a two-thirds working interest and Canadian-United one- third, is based on a set of agreements to cancel all former contracts (involving as many as 16 parties), to dismiss all liens, lawsuits and other legal claims, and to consolidate and rationalize the complicated claim assemblage.

Recently expanded from about 13,000 acres to more than 45,000 acres, the Dome Mountain project has 300,000 tons of reserves grading 0.355 oz gold and 2.35 oz silver per ton, plus numerous exploration targets.

The companies hammered out the new deal during 10 weeks of negotiations after a property payment jeopardizing ownership of some key claims was missed by Total Energold (TSE) in early March.

The agreement calls for Teeshin and Canadian-United to purchase all the assets of Total Energold relating to the Dome Mountain project. For its part of the purchase, Canadian-United will issue Total Energold 1.8 million shares and a 7.5% net profit royalty agreement with a share buy-out option provision. Teeshin is to issue 3.0 million shares valued at 58.7 cents and a 7.5% net proceeds royalty payable out of its interest in the joint venture. Teeshin has an option to purchase the net proceeds royalty for $244,000, payable in stock.

These stock issuances are subject to regulatory approval, after which it is expected that all agreement will be closed simultaneously. Other underlying agreements were renegotiated and the joint venture will be responsible to other parties for cash payments and net smelter royalties to a maximum of 4%.

Teeshin and Canadian-United are reviewing the feasibility study with a view to reach a production decision and secure project financing for an underground mining operation this summer.

Approval-in-principle has already been received from the provincial Mine Development Steering Committee for the project. The partners expect that production could be achieved within about seven months of a positive production decision.

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