The option to enter a profit-sharing agreement on the Excelsior property owned by Steelhead Resources (VSE) has been dropped by FMC Gold (NYSE).
The original 90-day option, subsequently extended by 60 days, allowed FMC time to examine the property before it entered a profit- sharing agreement. Under the agreement, FMC would advance all funds to production and receive 100% of profits until payback. Profits would then be split 70% to FMC and 30% to Steelhead.
Wallace McGregor, president of Steelhead, noted that FMC is primarily interested in gold projects with a potential of more than one million o unces. FMC conducted a 7-hole drilling program to obtain geological information that would support the theory of a larger deposit, but without success. The Excelsior property, situated in Whatcom Cty., Wash., is estimated by Steelhead to contain probable reserves of 4.1 million tons grading 0.04 oz. gold per ton and 2.6 oz. silver.
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