An option to acquire an additional 500,000 shares of High Frontier Resources (VSE) has been exercised by Kennecott, a wholly owned unit of London-based RTZ Corp. The option was part of a previous agreement that allowed Kennecott to earn a 40% interest in four High Frontier properties by purchasing one million shares at $1.25 each (as well as exercising the option).
The properties include Washington Dome in Utah, Tokop in Nevada, as well as Township Butte and Uno, both located in Arizona.
The option was exercisable at $1.75 per share and the company plans to use a portion of the funds for a 15,000-ft. drilling program on the Washington Dome property.
Previous drilling on the property this year uncovered a gold system 7,000 ft. long with widths of 1,000-2,000 ft., open in all directions.
Bert Applegath, president of High Frontier, noted that the mineralization may represent leakage from an extensive gold system either beside the existing drilling, or underneath it.
The proposed program of at least 25 holes will test the deep downdip potential of the zone and will include stepout holes on the surface profile.
High Frontier recently traded at the 45 cents level, a substantial discount to the exercise price of the option.
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