Placer Dome US may enter joint venture with Athena

The formation of the joint venture is contingent upon the results of a $250,000(US) work program on Athena’s 100% owned Talapoosa property in Nevada.

The objectives of the program, which Placer U.S. will begin immediately, are to confirm previously reported grades and tonnages. In addition, metallurgical testing is planned to ensure that the deposit is not refractory in nature.

The Talapoosa deposit consists of two zones, a near-surface oxide zone and a larger and deeper sulphide zone.

The latest mineral inventory of the deposit (classified as geological reserves) is reported as 17.9 million tons grading 0.054 oz gold per ton and 0.654 oz silver. This figure includes the oxide zone, estimated to contain 1.8 million tons grading 0.044 oz gold and 0.581 oz silver. The sulphide zone remains open to the southeast and the northeast as well as to depth.

Athena President Kenneth Wright indicated that a stripping ratio had not yet been established but would likely be at least 3:1 waste-to-ore. He also said limited metallurgical work to date showed that the deeper sulphide zone will not require pressure oxidation to liberate gold.

The letter of agreement requires Placer U.S. to pay Athena $100,000 (US) per month until a joint venture is formed up to a maximum of $300,000. In addition, there is a 30-day deadline following completion of the work program.

If a joint venture is signed, Placer Dome U.S. must make an initial cash payment of $1 million(US) to Athena. The 51% interest can be earned through expenditures of $21 million and a commitment to production.

Under the joint venture, Placer must also initiate an exploration program on the remainder of the property and provide the first $1.5 million in expenditures. Wright noted that a number of prospects on the 19-square-mile property warrant investigation.

If a joint venture is formed, Placer U.S. must commit to buy $5 million(US) in Athena shares on the open market in four stages to the start of production.

In the past, the Talapoosa property was of interest to majors with Kennecott, Superior Oil, and Homestake, each drilling on the property at various times between 1977 and 1981. Kennecott, the last major on the property, established reserves of nine million tons grading 0.04 oz gold and 0.67 oz silver with a 6:1 strip ratio. The project was not deemed feasible at the time.

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