The agreement allows Newmont to earn a 55% interest in the Limon-La India exploration concession, a land package immediately north and east of Black Hawk’s Limon mining concession. Black Hawk, which gained ownership of Limon in 1998 when it took over Triton Mining, produced 18,611 oz. gold from the mine in the first quarter of the year and 65,483 oz. in 1999.
Under the terms of the agreement, Newmont must spend US$5 million within six years to earn the interest, then has an option to increase its interest to 75% by spending another US$4 million in the space of two years. The first-year work commitment is for US$275,000. Both companies’ boards will have to approve the agreement before it becomes effective.
Last year, Black Hawk applied for a 5-year extension to the term of the Limon-La India licence, which would mean a reduction to 1,736 sq. km. That extension is awaiting approval by Nicaraguan government regulators. The smaller concession would still cover two historical gold-producing areas: La India and Cerro Quemado.
The agreement also takes in two other Black Hawk properties adjacent to Limon, and Black Hawk is waiting for final government approval of the land applications. The two concessions cover 145 sq. km on the eastern boundary fault of the northwest-striking Nicaragua graben. East of the fault, the Nicaraguan highland is underlain by volcanic and intrusive rocks of Tertiary age, and to the west, within the graben, there are Tertiary and younger volcanic and sedimentary rocks. Both rock packages are potential gold hosts, sharing such gold deposits as Limon, Cerro Crucitas in Costa Rica, and El Dorado in El Salvador.
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