Financing agreement will let Nugget Pond work resume

An agreement in principle has been reached between privately owned National Mineral Corp. and Bitech Corp. (ASE) that will see exploration work resume on the latter’s Nugget Pond gold property in northern Newfoundland. Subject to various approvals, the deal calls for National to make option payments totalling $600,000 and provide up to $5.2 million in exploration and production financing for the project. This summer, a $425,000 field program is planned. It will consist of geochemical surveys and 15,000 ft. of diamond drilling.

Bitech estimates the Nugget Pond deposit contains minable reserves of 499,000 tons averaging 0.37 oz. gold per ton. Assuming an initial production rate of 300 tons per day, the high-grade operation would yield about 37,000 oz. gold annually at a cost of US$237 per oz. The company said capital costs stand at about $15.5 million, including $3 million for working capital.