Minnova unit in option deal on Blue Dog gold property

The Blue Dog property in Washington Cty., Idaho, was recently optioned by the U.S. unit of Minnova (TSE), the third major to option the gold property in recent years.

Minnova can earn a 50% interest in the project from owner Gold Canyon Resources (VSE) by making cash payments amounting to US$100,000 and spending a total of US$1.5 million by Sept. 1, 1996. Minnova can earn an additional 10% interest in the property by spending a further US$750,000 within 90 days of Sept. 1, 1996.

Gold Canyon hopes to finalize the agreement with Minnova by the beginning of September.

The adit zone, where most of the exploration on the property has been concentrated, contains an estimated preliminary reserve of six million tons grading 0.033 oz. gold per ton.

Gold Canyon recently updated the reserve from six million tons grading 0.025 oz. based on the addition of a 30% “adjustment factor” to make up for gold lost through high water flows.

Once a final agreement is signed, Minnova will be committed to spending US$250,000 on the property by Sept. 1, 1993. The company has not released its exploration plans for the property.

Noranda dropped its option on Blue Dog last year. More recently, Gold Fields Mining terminated an agreement to earn a 60% interest in the property.