A deal struck last December is giving Vancouver-based
In an agreement with the underlying property owners, Orvana extended by four years its purchase option on the project, 15 miles south of Butte.
Orvana can acquire a 100% interest in the 17-sq.-km property at the original price of $1.7 million, with the extension ending Oct. 31, 2002. As part of the agreement, Orvana must make annual payments of $50,000 and 25,000 shares on or before Nov. 1 of each year through to 2001.
Also, if the value of Orvana’s shares exceeds $5 over 30 consecutive trading days before the end of the option period, the company must complete the purchase at the originally agreed price.
The most developed target on the property, the Nevin Hill deposit, contains an indicated resource of 600,000 tons grading 0.33 oz. gold per ton (equivalent to 198,000 contained ounces) and an inferred resource of 1.5 million tons at 0.29 oz. gold (377,000 oz.). These resources remain open down-plunge.
Gold mineralization is associated with skarn alteration derived from the Lower Paleozoic Wolsey shale, especially near a contact with overlying dolomite. Mineralization is also controlled by local faulting in a zone of major northeasterly trending regional structures.
Orvana is considering two options for the next phase of exploration: continuing its surface drilling, or initiating underground development and exploration with a partner.
The restriction in Montana on cyanide use in new open-pit, heap-leach gold mines is not expected to affect the Butte Highlands operation directly, as the mineralization will be mined underground. Also, the ore can be custom-milled at nearby mills and will not be heap-leached, and the operation exists on patented land.
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