Inmet Mining (IMN-T) has cancelled its agreement to sell the Izok Lake polymetallic property in the Bathurst Inlet region of the Northwest Territories to Kit Resources (KIT-T).
The company’s decision stems from Kit’s failure to pay a second installment of US$900,000 by February 4 as stipulated in the letter-of-intent signed last November. The third, and final, payment of US$39 million would have been due on May 31, bringing the total price tag to US$40 million.
Kit says it decided against making the second payment in order to conserve cash, but will continue to seek financing for the project in hopes of fashioning a new deal. The company also says that Inmet has shown an interest in continuing negotiations.
The Izok Lake deposit hosts proven and probable resources of 16.5 million tonnes grading 11.4% zinc, 2.2% copper, 1.1% lead and 60 grams silver per tonne. In 1994, Inmet completed a feasibility study that found the project technically feasible, but deemed its transportation costs too high for a stand-alone operation. As a result, the company took a writedown, in 1996,of US$76.5 million.
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