The legal dispute related to an earlier deal between the two companies which Minnova saw as final and binding, but which Pacific Minesearch viewed only as a letter of intent.
Now that these differences have been resolved, Minnova can earn a 70% interest in the Victory property which is strategically located directly north of its 70%-owned Samatosum polymetallic mine project.
Owned 30% by Rea Gold (TSE), the Samatosum deposit has reserves of 661,000 tons grading 32.0 oz silver and 0.052 oz gold, 1.2% copper, 1.7% lead and 3.5% zinc per ton. The mine is expected to be in commercial production in June, with Minnova as operator.
To earn its interest in the Victory claims, Minnova must spend $600,000 on exploration and development and make cash payments totalling $80,000 by 1992. Under the terms of the agreement, at least $100,000 must be spent by the end of this year to keep the option in good standing.
Pacific Minesearch will assume a 30% working interest in a joint venture after Minnova completes its earn-in. If this is diluted to 10% thereafter, Pacific Minesearch would retain a 2% net smelter return royalty.
A work program that includes diamond drilling is scheduled to begin on the property soon.
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