Terra deals Camsell assets to Durga, for 30% interest

Alberta-listed Durga Resources has signed a letter of intent to acquire all of Terra Mines’ interest in the Camsell River area of the Northwest Territories.

The Camsell properties include a high grade silver deposit with reserves of 30,610 tons grading 30 oz silver per ton and 500,000 t ons of tailings containing metal values ranging from 0.5% nickel to 0.5% copper.

On hold since low silver prices forced Terra to suspend operations at Camsell in 1985, the properties and assets will be transferred to Durga for a consideration of $200,000.

Under the agreement, Durga will also issue to Terra 1.5 million common shares and warrants allowing for the acquisition of an additional 400,000 common shares at 50 cents per share for one year.

Edmonton-based Terra also re ceives a 1% net smelter royalty return to a maximum of $1 million and a position on Durga’s board of directors. According to Durga President Jasi Nikanj, Terra will hold a 30% interest in his company when the deal is complete.

“Terra is free now to concentrate on its Mexican gold interests,” he told The Northern Miner.

With a 500-ton-per-day mill, an airstrip and facilities for 150 personnel, already in place, Nikhanj will attempt to start an open pit operation at Camsell River later this year. He also plans to evaluate the tailings pond for its production possibilities.

Durga says it is also negotiating to acquire the mineral rights on 4,000 acres in the Camsell River mining district which it plans to evaluate for future exploration and development potential.

Other acquisition targets include potential gold properties in the Greenstone belt of the Slave Province, N.W.T. and some claims located near Echo Bay Mines’ Lupin deposit.

Starting next month, Durga will conduct an airborne survey of the Allan Lake gold property 60 miles northeast of Yellowknife.

With mineralization hosted in an iron formation, Nikanj says drilling at Allan Lake has already produced 7 ft of 0.36 oz gold and 13.01 oz over 1.3 ft.