Sikaman reports exercising the options with Agassiz Resources (TSE), Segal Finance and Rex Resources (Canada). Owner of the tailings, High River Resources (VSE), retains a 5% net smelter return royalty from all production. (High River is the successor to Nor- Acme Gold Mines.)
Total price to Sikaman was $5.88 million, to be paid by the issuance of 965,000 shares of Sikaman and promissory notes for a total of almost $2.1 million, payable Feb 28. The promissory notes carry provisions exercisable by Sikaman to convert int o 667,000 shares of Sikaman. The agreements are subject to regulatory approval.
The tailings deposit, located at the old Nor-Acme gold mine property, contains reserves of 274,000 tons grading 0.38 oz gold per ton, Sikaman reports.
Minproc Engineers of Denver, Colo., carried out a feasibility study on the project and concluded the project is technically and financially viable, Sikaman says. Minproc concluded the tailings dump can be treated over a 2-year period and will recover about 94,500 oz gold at an operating cost of $97(US) per oz. Project capital costs are estimated to be $14 million(US). In 1986, Agassiz had negotiated a deal with a European mining company experienced with the treatment of metallurgically difficult tailings. At that time, capital costs for a bacterial leaching process were estimated at $3 million(US).
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