Grayd hooks Newmont with La India (July 18, 2005)

Vancouver — Grayd Resource (GYD-V) has enticed Newmont Mining (NEM-N) to option its Mexican gold project known as La India.

Following three months of due diligence, Newmont is earning a 51% interest in the property, situated in Sonora state, by spending US$7 million over four years. Grayd will continue to operate the project during the first two years of the earn-in.

Under the option agreement, the major can acquire a further 19%, boosting its ownership to 70%, by completing a bankable feasibility study.

Newmont’s due diligence included mapping, several hundred surface samples, 1,000 line-km of airborne geophysics, and 20 line-km of ground geophysics.

La India is in the Mulatos gold belt, about 7 km from Alamos Gold‘s (AGI-T) 3-million-oz. Mulatos deposit, and characterized by Tertiary, volcanic-hosted, high-sulphidation, epithermal gold mineralization. Geologically, the Mulatos belt is believed to be similar to the Yanacocha district in Peru, where Newmont has a large footprint.

With a land position exceeding 70 sq. km, Grayd is the second-largest landholder in the Mulatos belt after Alamos.

Grayd President Marc Prefontaine says a fall drilling program at La India is likely.

The company also has projects in Alaska and British Columbia.

Shares in the junior recently traded at 25. Grayd has a market capitalization of $8.5 million based on 35 million issued shares.