LITERATURE REVIEW SPECIAL — Great Lakes funds work at Palmarito

Toronto-listed Great Lakes Minerals (GKM-T) has secured US$1 million in financing for its Palmarito silver-gold project in Mexico’s Sinaloa state.

Repadre Capital (RPD-T) will provide the funds in return for a 4% net smelter return royalty on all minerals recovered at Palmarito. The royalty will be reduced to 2% when the aggregate royalty payments exceed US$500,000.

After July 1, 1997, Repadre will have the option of accepting Great Lakes shares worth US$500,000 instead of the net smelter return royalty. The number of shares will be calculated using a purchase price per common share that is equal to 95% of the weighted average price of Great Lakes shares on the Toronto Stock Exchange for the 20 trading days immediately preceding the date on which Repadre notifies Great Lakes of its intention to acquire such shares.

Great Lakes has also agreed to increase to 4% from 3% Repadre’s net smelter return royalty on all minerals recovered from the Lluvia de Oro gold mine in Mexico’s Sonora state.

The Lluvia de Oro mine poured its first gold in May. Annual production is expected to be 25,000 oz. Current ore reserves are 5 million tonnes at 1 gram gold per tonne, with an additional 3.5 million tonnes, also at 1 gram gold per tonne, identified outside of the main pit.

Great Lakes continues to work on the Palmarito prefeasibility study; representative samples for metallurgical testing have been received; and recovery tests for gold and silver will soon begin. A drill program at Palmarito is scheduled to begin in the fourth quarter, with the goal of infilling the known resource and continuing exploration of the body along strike and at depth.

Meanwhile, Great Lakes has completed a private placement in which it will receive $517,500 for 1.7 million shares priced at 30 cents each.