Producer TVX Gold (TSE) is set to acquire an Ecuadoran gold property from La Direccion de Industrias del Ejercito (DINE), a state-owned company which participates in the private sector.
The Pachicutza project is 60 km southeast of Loja, capital of Zamora-Chincipe province, near the Peruvian border.
Previous exploration on the 11,517-hectare ground identified gold-bearing skarn and porphyry-type deposits thought to be open-pitable. DINE will transfer the property to a newly formed Ecuadorian company to be known as Condor Mine S.A. TVX will hold all the common voting shares of Condor through its 94%-owned subsidiary TVX S.A. Dine will hold a 10% preferred share interest, which will entitle it to a 3% net smelter return royalty and 2.5% of any dividends. The property is also subject to a 1% net profits interest held by DINE’s former partner in the project. TVX must spend US$3 million over three years and reimburse DINE’s former partner for US$1.1 million in expenditures.
TVX is exploring the property to outline targets for drill-testing.
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