Toronto-based Wheaton River Minerals (TSE) says it intends to start a feasibility study at the Skukum Creek gold and silver property near Whitehorse, Y.T., after acquiring the project from Omni Resources (VSE).
While postponing a previously announced takeover bid for Omni for at least one year, Wheaton says it has agreed to pay the Vancouver company a floating net smelter return royalty from any future production.
The royalty ranges from 1% when the net smelter return (NSR) is below $80 per ton of ore, rising to a maximum of 30% when the NSR is above $360. Wheaton River will also pay Omni $500,000 in advanced royalties over four years and issue 600,000 shares over a 3-year period.
Wheaton River has agreed to pay out an additional 300,000 shares when the 300 ton-per-day Mount Skukum mill, acquired by Wheaton from Total Energold (TSE) and AGIP Resources, is up and running at a specified rate. The mill is located about five miles from the Skukum Creek property which is known to host 513,000 tons of grade 0.22 oz. gold and 8.01 oz. silver per ton. Wheaton River estimates the capital cost of bringing the project into production at a rate of 20,000 oz. gold annually to be $4.5 million and would require a 3-month lead time.
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