Midland/Rayrock Yellowknife reach Costa Rica agreement

An agreement to facilitate an extensive exploration program on the Bellavista/Montezume gold program has been reached between Midland Energy Corp. has reached an agreement with Rayrock Yellowknife Resources. Midland President Larry W. Reaugh says under the terms of the agreement, Rayrock can earn 50% of Midland’s interest in the project by funding 100% of Midland’s obligations up to $1.5 million. Rayrock is committed to spend a total of $450,000(US) in exploration expenditure and property payments before June 30, 1987.

Midland holds a 60% working interest in the property while Westlake Resources has the remaining 40%. Located about 80 miles northwest of San Juan in the Miramar area of Costa Rica, the mine project has reserves in excess of 3 million tons averaging 0.17 oz gold per ton, says Mr Reaugh.

Rayrock has unconditionally agreed to purchase 583,333 shares of Midland at 60 cents per share by way of a private placement with a warrant to purchase an additional 583,333 shares at 70 cents per share for one year.

Mr Reaugh says as long as the agreement remains in good standing Rayrock has options to purchase the major interest in Midland shares at prices ranging from $1.20 to $1.70 per share over four years. The agreement is subject to the receipt of written consent from Midland’s joint-venture partner and certain amendments being made to the underlying property acquisition agreement.

The president says agreement on all substantive issues has been reached with all partices concerned.