Meridian forms Newfoundland alliance

Junior Linear Resources (LRR-V) has farmed-out its Reid property in the Botwood Basin of central Newfoundland to Meridian Gold (MNG-T).

Under the terms of a letter agreement, Meridian can earn an initial 50% interest by making payments totalling $205,000 over three years and spending $1.5 million on exploration before the end of 2005. In addition, Meridian will invest $105,000 in a private placement of Linear consisting of 300,000 shares priced at 35 each. Half the proceeds will be applied to Linear’s Golden Star property. Meridian will hold a right of first refusal on all of Linear’s properties in Newfoundland and Labrador.

Earlier this year, Linear completed a short, 6-hole drill program on the Reid property and intersected a mineralized quartz porphyry system over a 200-metre-plus strike length. The best sections included 41 metres of 1.1 grams gold per tonne and 10.6 metres of 2.2 grams gold.

Linear will continue to be the operator of the Reid joint venture. The next phase of work will include regional exploration on the outlying claims. More detailed groundwork will be done in the mineralized porphyry area, including ground geophysics, sampling and geological mapping.

Meridian will have the right to earn up to an 80% interest by completing a bankable feasibility study and arranging project financing.