With a commitment to spend $6 million on exploration and development over a 3-year period, Southern Arizona Mining and Smelting (COATS) says it intends to form a joint venture with Gold Bar Resources (COATS) on the Chester Twp. gold property, near Gogama, Ont. Last month, when Southern announced intentions to purchase shares worth $2 million in two companies holding interests in the Eskay Creek area, its share price soared by about 30 cents to a high of 57 cents. Southern then pulled out of the agreements and the share price fell back to its previous level.
Under the terms of the agreement with Gold Bar, Southern will have the right to earn a 50% interest in the claims, said Gordon Leliever, president of both Southern Arizona and Gold Bar. Gold Bar drilled about 160 holes on the property in 1989, and at one time, the company announced that a production decision would be made this year.
Leliever told The Northern Miner Gold Bar is currently preparing a prefeasibility study on the property and will release ore reserve estimates within the next few weeks. Southern will raise the money for further exploration and development through private financing agreements, said Leliever.
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