Seine, new partner acquire Lincoln project in California

By taking on a joint venture partner, Seine River Resources (VSE) was able to complete the US$5 million acquisition of a California gold project which it hopes to develop into a 500-ton-per-day producer. Seine River made a US$ 0.5-million deposit in July of this year as a first step to acquire the Lincoln project from FMC Gold (NYSE). New partner U.S. Energy (NASDAQ) recently furnished US$5 million for the balance of the purchase price, adjustments and initial working capital.

The project, in California’s Mother Lode district, will be managed jointly by a committee made up of three representatives from U.S. Energy and two principals of Seine River.

The partners are now working to complete a full feasibility report based on a proposed production rate of a minimum 500 tons per day. Seine River said this rate would almost double the prefeasibility report’s estimates of 98,766 oz. (at an average grade of 0.66 oz. gold) to be mined during the first 1.5 years of operation. At this rate, Seine River expects payback could be achieved in less than a year. In the remaining years, reserves would average about 0.33 oz. gold per ton.

Some 61,000 ft. of drilling have been completed on the property to outline three zones containing an estimated 220,000 oz. gold: the Lincoln, Comet and Stringbean Alley.