Skukum Creek to be developed by Omni and Skukum Ventures

A joint venture agreement between Omni Resources and Skukum Ventures will hasten development of the Skukum Creek gold property located in the Wheaton River area of southern Yukon.

To earn a 40% interest, Skukum Ventures as operator will fund 100% of the cost of bringing the property on stream. Cost of a 500-ton- per-day operation are estimated at between $15 to $20 million. Skukum is currently arranging financing.

The agreement calls for a final feasibility to be conducted during 1988 with construction to begin no later than 1990. Once production starts, Skukum will own a 40% and Omni a 60% interest in the project.

In addition, Omni has granted Skukum the option to purchase up to three million Omni shares. The first million may be purchased at $6 within three years; the second million at $7 within four years and the third million at $8 within five years. Any shares not purchased at $6 within the first three years may be bought in the fourth or fifth year at $7 or $8 respectively. And shares not purchased at $7 within four years may be purchased at $8 during the fifth year of the share option.

Drill-proven reserves stand at 821,000 tons averaging 0.225 oz gold per ton and 8.96 oz silver. Within this reserve is a higher grade portion consisting of 183,000 tons averaging 0.575 oz gold and 16.5 oz silver. Omni retains a 100% interest in both its adjoining Scar prospect joint-ventured with Noranda Exploration and on a large block of claims known as the Kim and Kidd.

Skukum Ventures plans to change its name to Skukum Gold. Ernest Bergvinson is president of both companies.