MacMillan Gold sews up Cerro de Oro surface rights

It’s a sort of rent-to-own. Seeking security of tenure over surface rights at the Cerro de Oro gold and silver property in Zacatecas state, Mexico, MacMillan Gold (MMG-V) has negotiated an option agreement for the surface rights to part of the mineral property.

Macmillan gets an option to purchase a 12.3-sq.-km property contiguous with part of its 22-sq.-km exploration concessions for US$5,000 in cash and US$1,000 per month until the option is exercised. The vendor and MacMillan agreed the exercise price would be that set by an independent appraiser, US$252,000 for land and buildings, plus US$100,000 for existing dumps and tailings on the property. The US$5,000 closing fee would be credited against the payment if the option is exercised.

MacMillan is earning 100% of the mineral rights from private Mexican firm Cia. Fresnillo, through a four-year option agreement sgined in September 2002. Fresnillo gets US$70,000 over four years and retains a 3% net smelter return, and MacMillan earns its interest once US$500,000 has been spent.