Vancouver — Having made the initial $250,000 payment required for the purchase of the Salamandra gold property in Mexico,
The junior took over the advanced project late last year from
The $10.5-million deal was originally slated to close at the end of February. However, regulatory hurdles forced National Gold to bump the date ahead to mid-March. Financial problems then resulted in a second extension, forcing Placer and Kennecott to defer $2.75 million of the closing payments to July and to agree to pay the $1.6-million refundable IVA tax. This enabled National Gold to close the deal.
On the back of the acquisition, National Gold had hoped to raise $5.2 million, but poor market conditions prompted the junior to close a $750,000 interim financing.
The private placement originally comprised 8 million special warrants priced at 65 each. The closing financing included 3 million special warrants at 25 each. A special warrant includes one share and half a purchase warrant exercisable at 35 for one year. The junior is re-pricing the balance of the financing.
The Canadian Ventures Exchange has requested that National Gold complete a $1.6-million financing before July 15 and a second financing for an additional $2 million by Aug. 30. If these financial obligations are not met, the company may run afoul of the exchange’s maintenance requirements and be downgraded to the status of inactive trading. National Gold says it is confident it can raise the funds.
The 151-sq.-km property, situated 400 km south of Tucson, Ariz., in the Mexican state of Sonora, hosts the 3.4-million-oz. Mulatos gold deposit.
Since 1993, Placer and Kennecott have spent more than $50 million exploring the property. Based on a cutoff grade of 0.8 gram gold per tonne, a 1997 feasibility study pegged the measured and indicated resource at 68.3 million tonnes grading 1.57 grams gold. Included in this resource is a higher-grade core of 11.5 million tonnes grading 3.2 grams gold.
Salamandra is held 70% by Placer and 30% by Kennecott, a subsidiary of
Mineralization is hosted in a large, high-sulphidation gold system which is found preferentially stratabound in felsic volcaniclastics and porphyritic flows. Alteration is well-zoned, extending from a gold-bearing core of silicic and pyrophyillite clays to kaolinite-illite-dickite clays and finally to a propylitic zone.
Under the deal, $3 million is payable in the first year. The remaining $7.5 million is secured by a debenture and payable at the end of the fourth year. The debenture carries a 7% interest payable semi-annually. The vendors retain a 2% net smelter royalty on the first 2 million oz. gold produced.
National Gold is talking to a several major gold producers about a possible financing and joint-venture arrangement.
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