Metallica Resources (MR-T) is adding two new gold properties to its portfolio, one of which is a recent gold producer.
The latter property includes the Mara Rosa mine in Brazil, which the company is acquiring from a Brazilian subsidiary of Australian major Western Mining for US$1.5 million. Terms of the agreement call for an initial payment of US$400,000 upon signing, and one additional payment of US$1.1 million two years hence.
The 25,000-ha Mara Rosa mine property is 350 km northwest of Brasilia, in Goias state.
Geologically, the property lies within the Mara Rose greenstone belt.
Mineralization is associated with a felsic volcanic unit lying along the contact between a mafic volcanic unit and a sedimentary unit; the contact is exposed for 20 km on the Mara Rosa property.
The property produced 86,000 oz. gold from two operations — Mara Rosa and Posse — between 1989 and 1995, when both were closed. Proven and probable reserves (minable by open-pit methods) at Posse are 1.2 million tonnes grading 2.08 grams gold per tonne. Drilling has indicated that this zone continues at depth, averaging 40 to 50 metres thick down as far as 300 metres. Drill intercepts include: 6 metres grading 6.6 grams gold per tonne; 3 metres of 9 grams gold; and 3.2 metres of 6.2 grams.
Metallica is working on a resource calculation regarding the above mineralization.
Meanwhile, Metallica has agreed to sell a 1% net smelter return royalty on the project to Euro-Nevada Mining (EN-T) for US$400,000. The deal allows Euro to purchase options for 100,000 Metallica shares at $3 each for one year.
Euro also has a 2-year option to buy an additional 1% royalty for US$1.1 million.
The second acquisition involves the expansion of Metallica’s Cerro San Pedro project. Metallica is purchasing 8,290 ha of land surrounding its own property from Santa Fe Pacific Gold, a subsidiary of Newmont Gold (NGC-N), along with
a 757-ha property immediately southwest of Metallica’s proposed open pit.
Santa Fe had been earning a 70% interest in the latter property from the Las Cuevas joint venture, which is owned by two Mexican firms. Metallica must complete Santa Fe’s work commitment in order to acquire its interest.
In return for the two properties, Metallica will release to Santa Fe and the Las Cuevas partners a total of 320,000 shares over a 12-Month period.
Metallica has engaged two European investment banks to co-underwrite a project loan of US$70 million for the development of Cerro San Pedro.
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