Newmont options Solitario’s La Tola

An agreement with Solitario Resources (SLR-T) allows gold-mining giant Newmont Mining (NEM-N) to earn up to a 65% interest in the La Tola property in southern Peru.

Solitario identified and acquired the 121-sq.-km property in late 2003, during a grassroots program.

Work to date has focused on an 8-km-long corridor of alteration and strongly anomalous gold and trace element geochemistry. The disseminated and stockwork gold mineralization identified on the property is part of a large, low-sulphidation gold system in Tertiary rocks.

The next stage of work will include extensive geochemical sampling, ground geophysics and mapping to define drill targets. Newmont plans to carry out at least 2,500 metres of drilling as part of its earn-in commitments in the first year.

To acquire an initial 51% interest, Newmont must spend US$7 million on exploration and development over four years. It can boost its stake to 65% by completing a feasibility study and arranging project financing.

In addition to its participating interest, Solitario will retain a sliding-scale net smelter return royalty of up to 2.25% on gold and silver production. Solitario also holds a royalty on 600 sq. km of claims adjacent to Newmont’s Yanacocha gold mine, also in Peru.

Denver-based Solitario is held 37.6% by Crown Resources (CRCE-O), whereas Solitario holds a 13.6% interest in Crown. Last fall, Kinross Gold (K-T) announced it would acquire Crown, and that transaction is expected to close shortly.