Toronto-listed High River Gold Mines can acquire gold and silver production rights from certain properties in Manitoba held by Hudson Bay Mining & Smelting (TSE).
The agreement covers 17 properties adjacent to the New Britannia joint venture near Snow Lake. The venture, equally owned by High River and TVX Gold (TSE), includes the New Britannia gold mine which is scheduled to enter production in the third quarter. Annual production is targeted at 100,000 oz. High River will be given a 3-year option to acquire the properties, along with the right to produce gold or silver. Hudson Bay (HudBay) will retain rights to all other metals contained on the properties. As a consideration, High River will issue 150,000 common shares to HudBay and, if the option is exercised, must issue an additional 150,000 shares.
During the term of the agreement, High River must spend $1 million on the properties, with minimum expenditures of $200,000, $400,000 and $600,000 due by Jan. 31 of 1996, 1997 and 1998, respectively.
If High River exercises the option, HudBay will be entitled to a 1.5% royalty based on the gross proceeds of the sale or disposition of any gold or silver mined from the optioned properties.
The option agreement will be assigned to the New Britannia joint venture, thereby expanding the land package available for it to explore.
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