Mindoro Resources (MIO-V) has granted Australia’s Newcrest International an option to earn a 75% interest in the Tiris gold project in Sumatra, Indonesia.
In mid-June, Newcrest plans to begin 1,250 metres of core drilling on the Selatan anomaly, one of three large gold-in-soil anomalies on Tiris’ Harimau prospect. As part of the option deal, Newcrest will manage and fund the drilling, of which 1,000 metres must be completed regardless of whether or not Newcrest elects to earn its interest.
Newcrest can earn its interest by funding US$2.7 million worth of work (including the initial drilling) over six years. Once Newcrest earns its stake, Mindoro can:
- convert its 25% interest into a 2.5% net smelter royalty (NSR);
- dilute to a 10% interest; or
- convert to a NSR on a gradually reducing scale.
If Mindoro’s stake falls to 10%, it will automatically convert to a 1% NSR. The company’s NSR would increase by 25% during any quarter in which the spot gold prices exceeds US$350 per oz.
The Tiris project covers 100 sq. km in the Lebong gold district. The project’s main target is the Harimau prospect, a very large, strong, low-sulphidation, epithermal gold-silver system, which contains multiple zones of low-grade, stockwork, gold-silver mineralization.
This system has been defined over an area that measures about 2 km by 5 km. Gold grades from outcrops across the area range up to 1 gram per tonne. Gold grades from floats range up to 10.6 grams per tonne. Silver values run up to 520 grams.
Last year, Newcrest produced just less than 1 million oz. gold from mines in Australia and Indonesia, including the Gosowong mine, which produced about 275,000 oz.
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