Barytex eyes Mantua (August 01, 2001)

Vancouver — Junior International Barytex Resources (IBX-V) has inked a deal to pick up Northern Orion Explorations‘ (NNO-T) 50% stake in the past-producing Mantua gold project in Cuba.

Located in the western part of the country, Mantua is a 50-50 joint venture between Northern Orion and Geominera, a Cuban state-owned company.

Production started in 1998. The operation was slated to crank out over 100,000 oz. gold per year from a reserve tallying 1.7 million tonnes grading 1 gram gold. However, cash operating costs soon started to soar and operations were halted in September, when it became clear that the gold-leaching project was uneconomical.

The company then developed a new strategy aimed at developing Mantua as a copper producer. The project hosts a measured and indicated resource of 12 million tonnes grading 2% copper. Using a cutoff grade of 0.7% copper, a pit optimization program outlined a resource of 7.5 million tonnes grading 2.7% copper with a 5.2-to-1 strip ratio.

Barytex can earn Northern Orion’s stake in the venture by assuming and paying all carrying costs related to Northern Orion’s operations in Cuba, as well as completing a bankable feasibility study within 18 months. The company must also arrange all production financing and begin construction within 90 days of reaching a production decision.

Geominera owes Northern Orion US$28 million from past exploration expenses. Barytex can purchase this debt by issuing 4.5 million shares to Northern Orion. The project is also subject to a 2.5% net smelter royalty.

The deal is subject to a due-diligence period. This ends Aug. 15.