Kit Resources (KIT-T) and Inmet Mining (IMN-T) have extended the deadline for a letter-of-intent agreement that will see the former purchase the latter’s Izok Lake polymetallic property in the Bathurst Inlet area of the Northwest Territories.
Kit, which has covered US$100,000 of the deal’s requirements, now has until Feb. 4 to cover the second installment of US$900,000. Financing for the third and final payment of US$39 million must still be arranged by May 31.
All other terms of the agreement (T.N.M., Dec.1/97) remain unchanged.
Izok Lake hosts proven and probable reserves of 16.5 million tonnes grading 11.4% zinc, 2.2% copper, 1.1% lead and 60 grams silver per tonne. The bulk of the reserves are minable by open-pit methods at a stripping ratio of 3.6-to-1.
While Inmet found the project technically feasible in 1994, it deemed transportation costs too high for a stand-alone project and subsequently took a writedown last year of $76.5 million. Kit, on the other hand, believes it can lower operating costs, partly because the Canadian Hydrographic Service recently chartered a navigable route for deep-draft vessels to a proposed port site at the southern end of Bathurst Inlet. The site is located 243 km east of Izok Lake.
A feasibility study will be initiated in February, with completion targeted for August. The study will consider dividing infrastructure costs between Izok Lake and George Lake, Kit’s advanced gold-silver project situated 230 km to the east.
In other news, Kit reported a loss of $1.5 million (or 5cents per share) for the nine months ended Sept. 30, compared with losses of $424,397 (4cents per share) in the same period of 1996. The difference between the periods is attributed to the newly acquired George Lake project.
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