Gammon renegotiates Ocampo deal again

Halifax-based Gammon Lake Resources (GAM-T) has once again renegotiated the payment schedule for its Ocampo gold-silver project in Mexico’s Chihuahua state.

In its latest incarnation, the deal would see the junior acquire all of Minerales de Soyopa’s Ocampo claims by: paying Soyopa US$100,000 in cash on signing the agreement, plus US$125,000 by May 23, 2002; and paying US$3.5 million by Nov. 23, 2006, plus another US$3.5 million a year later.

If Gammon brings the project to production before Nov. 23, 2006, it must pay Soyopa US$1 million per year, beginning on the first anniversary of production. Such payments will be deducted from the US$7 million payment obligation.

Should Gammon decide to sell or transfer the concessions to a third party, the balance of the US$7 million owing at that time must be paid off.

Gammon must also issue Soyopa 5 million shares. For two years after the issuance, the shares can only be sold for at least C$2.50 apiece. After that, the shares can be sold for C$1 apiece, any less than that and only half the outstanding shares can be sold.

Finally, Soyopa will nominate one member to Gammon’s board of directors.

Soyopa’s concessions will be transferred to and registered under Gammon Lake’s name immediately. The company says the new deal will allow it to accelerate development of the project once an ongoing feasibility study is complete. It also reduces the cash obligation from about US$17.5 million (due in two years under a previously renegotiate deal) to US$7 million.

Gammon also has a deal to acquire a 100% interest in Fuerte Mayo’s Ocampo concessions. Under that deal, which was reworked this summer, no further payments will be made to Fuerte Mayo until the sale of the Ocampo asset is realized; all royalties to Minera Fuerte Mayo are eliminated; and US$211,526 will be paid to Fuerte Mayo on the sale of the Ocampo asset by Gammon.

Together, the two agreements cover virtually the entire 25-sq.-km Ocampo mining camp.

At last report, Ocampo’s hosted resources of 21.7 million tonnes grading 1.44 grams gold and 57 grams silver per tonne in the measured and indicated category (1.8 million contained ounces gold-equivalent) plus 5.8 million inferred tonnes of 1.7 grams gold and 86 grams silver (637,000 contained ounces gold-equivalent.