Treminco Resources (TMO-T) will pay $4 million to Newhawk Gold Mines (NHG-T) for its 60% interest in the Bruceside-Sulphurets gold-silver project in northwestern British Columbia.
A $2-Million payment is due upon closing of the agreement, scheduled for Sept. 8, to be followed by a further $1.5 million 90 days thereafter and a final $500,000 either upon the start of commercial production or 36 months after closing.
The remaining 40% interest is owned by Toronto-based Black Hawk Mining (BHK-T).
The project, which lies in rugged terrain, 60 km north of Stewart, was previously explored in the 1980s and early 1990s. Work at the time consisted of more than 75,000 metres of diamond drilling and 5,300 metres of underground development.
Geological reserves within the West zone were estimated to be 826,000 tons grading 0.45 oz. gold and 18.9 oz. silver per ton, while the total resource stood at just over 1 million tons grading 0.47 oz. gold and 16 oz. silver.
In 1990, a feasibility study estimated that the West zone contained a diluted minable reserve of 550,000 tons grading 0.42 oz. gold and 18 oz. silver. The study concluded that a 350-Ton-per-day operation producing, on an annual basis, 67,500 oz. gold-equivalent would be uneconomic.
Capital costs were projected at $42.7 million, including $3 million in working capital and a 15% contingency.
Treminco intends to review and rework the feasibility study. President Robert Trenaman believes capital costs can be lowered to between US$15 million and $20 million, provided a smaller, 150-To-200-Ton-per-day plant is constructed.
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