Placer, Brazilian strike Sabara deal

The Brazilian subsidiary of Placer Dome (PDG-T) will acquire from Brazilian Resources (BZIN-C) an interest in the Sabara gold property.

To earn its 70% stake, Placer Dome must make option payments worth $21.5 million over the next two years. New Hampshire-based Brazilian will retain a 30% interest, and will be exempt from the first $5 million spent on work programs there. The agreement is secured by Placer Dome through a US$500,000 escrow fund, which will be released to Brazilian once the deal closes.

Situated in the Quadrilatero Ferrifero mining district (which hosts numerous gold deposits and banded-iron formations) of Minas Gerais state, the property covers 6,000 acres near the town of Belo Horizonte.

Brazilian’s subsidiary has completed two work programs at Sabara over the last 15 months. The deal will allow Placer Dome to explore zones A and B, known as the “Core Area,” two of several targets on the property.

In addition, Placer Dome can earn a 70% interest in the area surrounding the zones by paying US$6 million and spending the first $5 million on work programs.

In other news, Placer Dome says it will buy from Echo Bay Mines (ECO-T) 4,175,275 shares of Etruscan Enterprises (EET-V). That deal will give Placer Dome a 24.3% stake in Etruscan.

The acquisition follows this month’s announcement of an agreement between the companies concerning the exploration and development of the Samira gold deposit, on the Tiawa property in Niger, West Africa.