Placer to take Sleeper from X-Cal — Agreement with Amax Gold extended

Vancouver-based junior X-Cal Resources (XCL-T) has extended its purchase agreement with Amax Gold (AU-N), paving the way for Placer Dome (PDG-T) to take an interest in the Sleeper gold project in northern Nevada.

The junior has paid US$250,000 to Amax to extend its option to purchase the remaining half of the Sleeper property, north of Winnemucca, Nev., that it does not already own.

X-Cal entered into a 50-50 agreement with Amax in early 1996 to explore for gold on the 12,000 acres of combined lands around the Sleeper mine.

Enter Placer Dome, which, like X-Cal, still believes there are additional gold reserves yet untapped at Sleeper. The major has reached an agreement to provide up to US$24 million to earn a 60% interest in the project.

Placer can earn a half interest by providing the purchase money due Amax under the X-Cal option (which totals US$16 million), plus reimbursing X-Cal for the value of 1.5 million shares, which it is to deliver to Amax upon the purchase. The major can earn an additional 10% by funding another US$8 million in exploration and development costs for the project.

When Placer has earned its interest, X-Cal must decide either to participate as a 40% working partner or be reduced to a 30% carried interest.

X-Cal says the purchase of Sleeper will result in modest cash flow for both itself and Placer.

Meanwhile, Placer has commenced its due diligence evaluation. Five drill rigs are expected on the property soon.

X-Cal’s option to buy the remaining half of Sleeper has been extended to Aug.

27. Placer must make its decision by Aug. 20.