Sikaman to acquire Snow Lake tailings deposit

Toronto-based Sikaman Gold Resources (TSE) says it has entered into agreements which would give it the right to treat a gold tailings deposit at Snow Lake, Man.

The tailings deposit, owned by Nor-Acme Gold Mines (TSE), is estimated to contain 275,000 tons grading 0.377 oz gold per ton.

A feasibility study on the deposit by Minproc Engineers of Denver, Co., is scheduled for completion in late November, and preliminary data from the study suggest that production could begin in mid-1989 at a rate of 45,000 oz per year. Production costs are estimated to be less than $120(US) per oz.

Acquisition agreements for the tailings deposit were made with Sengal Finance, Ranger Exploration, and Agassiz Resources (TSE).

The agreements with Sengal and Ranger, who share a 59% interest in the tailings deposit, call for Sikaman to pay $1,130,000 on closing with the balance payable by issuance of 725,000 shares. Sikaman has an option to purchase Agassiz’s 41% interest on or prior to Nov 30 for $1,850,000. Of this amount $925,000 is payable in cash with the balance payable by issuance of 250,000 shares.

Nor-Acme Gold Mines, the owner of the tailings deposit, will retain a 5% net smelter royalty on all production. The acquisition of the Snow Lake tailings deposit, coupled with Sikaman’s 40.5% interest in the Bogosu project in Ghana, West Africa, is expected to result in net production to Sikaman of 85,000 oz of gold per year commencing in late 1989.