EXPLORATION ROUNDUP — Metallica picks up Brazilian mine

Metallica Resources (MR-T) has signed an agreement to buy the Mara Rosa gold mine in Brazil from a subsidiary of Western Mining (WSTM-N).

Metallica paid an initial US$400,000 upon signing the agreement, with the final payment of US$1.1 million due in two years.

The Mara Rosa property consists of 25,000 ha in Gois state, 350 km northwest of the capital city of Brasilia.

>From 1989 to 1995, the mine produced 86,000 oz. gold. It is currently inactive.

Minable reserves were last reported to be 1.2 million tonnes grading 2.1 grams gold per tonne, equivalent to 75,000 contained ounces.

Metallica is preparing a resource calculation based on work performed by Western Mining and Broken Hill Proprietary. Preliminary estimates suggest the resource could be as large as 750,000 oz. at a similar grade. The company plans to expand the deposit through additional drilling.

In a related transaction, Metallica sold a 1% net smelter return royalty on production from the Mara Rosa and 100,000 warrants to Euro-Nevada Mining (en-t) for US$400,000. Each warrant is exercisable, over a 1-year period, into a share of Metallica at a price of $3 per share. Euro-Nevada also has a 2-year option to increase the royalty to 2% by paying an additional US$1.1 million to Metallica.