Laramide leases gold deposit (December 23, 2002)

In exchange for cash and future royalties, Laramide Resources (LAM-V) has leased its Cerro Colorado mining claims in Mexico to a private Australian mining company.

Secotec paid US$50,000 in cash and has agreed to pay a 2% or 2.5% net smelter return royalty on the first 100,000 oz. of production. The exact amount of the royalty depends on whether gold is trading above or below US$350 per oz., and it increases by 0.5% on any subsequent production.

As part of the deal, Laramide can buy 10% of Secotec’s shares from Mexico Mining Investments should Laramide pursue a reverse takeover, be sold, be publicly listed or initiate a similar “liquidity event” over the next two years. The price is fixed at US$500,000.

Secotec operates a small placer mine 10 km from Cerro Colorado. The operation cranks out about 10,000 oz. annually.

Secotec already has the necessary permits to operate an open-pit, heap-leach operation at Cerro Colorado and thus expects to pour the first dor bar in a matter of months. Production is expected to vary between 20,000 and 25,000 oz. per year.

Resources are pegged at 6 million tonnes grading 1.5 grams gold per tonne.