An underground drilling program at the Pend Oreille zinc-lead property in Washington state of RFC Resource Finance (TSE) should be completed in July, President David Watkins said at the annual meeting in Toronto.
The work is being performed by Minnova (TSE), which has an option agreement with Kerr Addison Mines (TSE) to acquire Kerr’s 46% controlling interest in RFC. (Kerr is the controlling shareholder of Minnova and Pend Oreille is RFC’s only property asset.)
Minnova agreed to spend a minimum of $500,000 on the drilling program. Once that work is complete, Minnova plans to evaluate the property and, if it goes through with its option to acquire control of RFC from Kerr, take the project to the feasibility stage.
If the project is placed into commercial production, the Minnova deal with Kerr calls for repayment to begin in the third year of production at a rate equivalent to 3% of the net smelter return up to a maximum of $3.5 million. Watkins, who is president of Minnova, recently replaced Peter Bojtos, who resigned as RFC president. Botjos has since been named president of Consolidated Nevada Goldfields (TSE) of Denver.
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