After nearly a half year of negotiations,
Situated 80 km northwest of Hecla’s La Camorra underground gold mine, the Block B lease covers an 18-sq.-km area comprising three former producing mines — named Chile, Laguna and Panama — that produced about 1.5 million oz. gold from narrow, high-grade veins during the period 1921-46.
“Block B is an excellent complement to the La Camorra gold mine and the other exploration targets we have developed in Venezuela,” said Hecla Chairman Arthur Brown in a release.
Hecla will pay US$500,000 upon signing the final agreement and then pony up another US$1.25 million to CVG after six months. This will be followed by another US$1 million payment in one year.
These payments give Hecla the right to explore and develop Block B, though CVG is entitled to receive a 2-3% sliding royalty on any future production from the property.
Hecla will initially focus on the Chile mine, which produced more than 550,000 oz. gold at a grade in excess of 34 grams per tonne. Recent drilling at Chile by CVG has already identified a gold resource below Chile’s old workings of about about 245,000 oz. grading around 21.7 grams.
Hecla has already started seeking work permits and plans to begin an extensive drilling program in the fourth quarter to confirm and expand the identified resource.
Meanwhile, at La Camorra, Hecla reports that the mine produced more than 86,000 oz. gold in the first half of 2002 at an average total cash cost of US$134 per oz. This compares with the 152,000 oz. produced at a cost of US$133 per oz. during all of 2001.
Hecla’s remaining gold-silver mines are: Greens Creek in Alaska’s panhandle; San Sebastian in Mexico’s Durango State; and Lucky Friday in Idaho.
At the exploration level, Hecla recently teamed with
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