Newcrest buys into Argentine gold play

Australia’s Newcrest Mining is acquiring a controlling stake in the Canada Onda gold property in central Argentina from Solitario Resources (SLR-T).

The Aussie miner can earn up to a 60% interest in the 2,000-ha property by funding exploration, completing a prefeasibility study and making cash payments.

By spending US$1.75 million on exploration and paying US$200,000 over four years, Newcrest can earn an initial 51%. It must complete a prefeasibility study and spend another US$500,000 on exploration and development for the remaining 9%.

Solitario drilled 25 shallow holes over the past two years. Six of these intercepted high-grade gold values of up to 16 grams per tonne. Newcrest has committed to spending US$200,000 on further drilling in 1998.

Canada Onda is one of 20 Argentine properties held by

Solitario’s subsidiary, Compania Minera Solitario de Argentina (CMSA). In March, Solitario agreed to sell CMSA to TNR Resources (trr-v) for $500,000.

In turn, Solitario will invest the funds back into TNR by way of a private placement, giving Solitario as much as 20% of the outstanding shares of TNR and entitling it to one seat on the board of directors. The transaction is expected to close by mid-May, at which time TNR will inherit Solitario’s interest in the joint venture with Newcrest.