Vancouver — Gitennes Exploration (GIT-T) has sold its Virgen gold property in north central Peru to a private Peruvian company for US$1.5 million.
Gitennes received US$1 million at closing, with the remaining US$500,000 payable in 30 days. The junior also retains a 2% net smelter royalty on any gold production greater than 145,000 oz.
Gitennes worked the property from 1996 to 1998, subsequently dealing it to Cambior (CBJ-T) in 1999. However, Cambior defaulted on property payments last year. A dispute then erupted between the original owners of the property and Cambior created a stumbling block for Gitennes. According to the deal, financially troubled Cambior was required to transfer all its right, title and interest in the property to a Peruvian affiliate of Gitennes. Due to the dispute, Cambior was not able to transfer the property.
Prior to dropping the property, Cambior reported that an in-house resource estimate on the Rio Suro gold zone at Virgen has come in at 12 million tonnes grading 1.22 grams per tonne. The new estimate is based on 56 previously drilled surface and underground holes and 38 new infill holes completed by Cambior last year. Using a 0.4-gram-gold cutoff grade, the deposit hosts a measured resource of 3.5 million tonnes grading 1.62 grams gold, an indicated resource of 8.6 million tonnes grading 1.05 gram and an inferred resource of 4.4 million tonnes grading 0.86 gram.
The Rio Suro zone is an oxide gold deposit discovered by Gitennes in 1997. Cambior entered into an option agreement to buy the property in December 1998 for US$7 million in cash, payable in three payments over three years. Cambior paid US$2.5 million on signing but returned the property to Gitennes before paying the second US$2.5-million payment.
Initial metallurgical tests by Gitennes indicate that run-of-mine ore may be heap-leached, with a minimum 80% gold recovery.
Rio Suro is one of 10 mineralized gold zones in nine exploration concessions that comprise the Virgen property. Lesser-explored targets on the property include the Centro, Alumbre, Paloquian and Cuchi zones.
Gitennes plans on using to the funds to identify new projects.
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