Richmont takes aim at Valentine

Richmont Mines (RIC-T) has a drill rig on its way to test the Leprechaun Pond area on the Valentine Lake gold property in central Nfld.

Slated to begin in early February, the first phase of drilling calls for 5 holes totalling 1,250 metres. The drilling, part of Richmont’s due diligence, will run through March. Previous drilling by BP Minerals returned up to 9.1 grams gold per tonne over 9.6 metres, 6.3 grams gold over 4.6 metres, 7.4 grams over 4 metres, and 9.12 grams over 3 metres.

Drilling on the 121-sq.-km property is designed to confirm the plunge and dimensions of a system of quartz-tourmaline veins containing high grades of gold. So far, about 800 metres of the system have been drilled; the zone remains open at depth from 180 metres below surface.

Late last year, Richmont agreed to take a 70% undivided interest in the property by paying Mountain Lake Resources (MOA-V) $25,000 in cash and spending $2.5 million on exploration by October 31, 2007; the company must spend $500,000 of that in 2004, with $150,00 spent during the due diligence period, which wraps at the end of this March.

Noranda (NRD-T) retains a 2% net smelter return royalty on base metals produced from the property. The major also has a 1.5% nsr on the first 250,000 oz. of gold; thereafter the payment rate increases to 3%. Under a deal inked in 2002, Mountain Lake, which already has a half-interest, can acquire the balance of the property from Noranda by spending $2.5 million over the next 5 years.