Placer Dome terminating Claude option agreement

Placer Dome Inc. (TSE) has terminated its option agreement with Claude Resources (TSE) which saw the former company spend $8 million on Claude’s Seabee gold project. Located northeast of La Ronge, Sask., the Seabee property hosts reserves of 813,000 tons grading 0.36 oz gold per ton.

Under the option agreement, Placer had to complete a feasibilty study by June. Claude was carried to production as to its 50% interest. “They had to deliver a feasibility study this month (June) and couldn’t make it,” Peter Gummer, vice-president minerals at Claude, told The Northern Miner. “They asked for an extension but we didn’t come to terms,” he explained. Gummer also said that Placer believed the project required additional work whereas Claude disagreed.

With 100% of the property back in its hands, Claude plans to go ahead with a prefeasibility study, scheduled for completion by August. This will be followed by a project feasibility study. Gummer says a best-case scenario sees the project producing gold by the last quarter of 1989 at a capital cost of $20 million. This includes the construction of a 350-ton-per-day mill which will be capable of producing more than 50,000 oz of gold per year during the first two to three years of the project’s life. This, Gummer says, is due to several high grade zones which will provide the mill with feed averaging in excess of 0.5 oz gold per ton.