Tone projects catch eye of Teck Cominco (March 25, 2004)

Vancouver-based Tone Resources (TNS-V) has entered into a ‘strategic alliance’ with Teck Cominco (TEK-T) to explore an area of mutual interest in Nevada.

Tone holds eight projects situated near or within the famed gold trends of north-central Nevada. The junior was founded and is managed by mining entrepreneur Scott Baxter and geologist Dave Mathewson. Until May of 2001, Mathewson was the manager of Newmont Mining’s Great Basin and Carlin Trend exploration programs, and is credited with the discoveries of the Northwest Rain, Tess, Saddle and Emigrant South gold deposits in the Rain district.

As part of its agreement with Tone, Teck Cominco agreed to take part in a private placement of 1 million units at 50 cents per unit. Each unit consists of one share and a warrant to buy another share at 75 cents within two years.

Tone intends to use $350,000 of the proceeds to explore its Nevada properties, and $150,000 for working capital.

Teck Cominco will have the right to earn interests of 51%, and up to 75%, in any two projects now held by Tone, or that are acquired over the next two years.

The major also has a right of first refusal on Tone’s Red Ridge property, situated on the Carlin Trend. This project is described as an untested “Rain-deposit-like target” immediately adjacent to Newmont’s 1.5-million-oz. Emigrant Springs/Emigrant South deposit.

Tone’s Roberts Mountain project, situated within the Battle Mountain/Eureka gold trend, also contains numerous untested targets. Tone’s properties in Nevada include a total of 320 claims and two leased sections.

Teck Cominco can earn its interests in the chosen projects by meeting certain requirements, which may include the preparation of a feasibility study and arranging debt financing. The company also has certain rights to participate in Tone’s future financings.