Cambior, Southwestern form Peru joint venture

Having already established itself as a leading Latin American gold producer, Cambior (TSE) is forming a joint venture with

soon-to-be-Vancouver-listed Southwestern Gold on Southwestern’s Peruvian exploration projects.

Under the agreement, Cambior can earn a 60% interest in the Cristo Rey project in return for payments of US$5 million over four years, financing a feasibility study, and supplying the necessary funding to bring the property into production.

The property, about 95 km southwest of Cuzco in southern Peru , consists of 5,000 hectares of exploration concessions with a further 7,800 hectares under application. Previous exploration outlined a 350-to-800-metre-wide leached, oxidized, sulphide zone with a strike length of more than 2,300 metres. Surface sampling of the zone returned values up to 0.37% copper, 11% lead, 1.46% zinc, 115 grams silver per tonne and 0.65 grams gold.

Cambior also has the right to buy a further 10% interest in the project with the first additional 5% priced at US$3 million and the second 5% to be priced when production begins.

As part of the deal, the partners have also committed to spend US$2 million to explore 9,000 hectares in the Abancay Regional project on a 50-50 participating interest basis. To date, Southwestern has delineated 23 targets in this area.

Cambior has also been given the first right to carry out due diligence on Southwestern’s seven other 100%-owned properties in the Abancay Regional project area which total 13,600 hectares. Cambior will have the right to earn a minimum 51% interest in each of the properties, with terms being negotiated on a property-by-property basis.

Cambior operates each of the joint ventures.

In other news, Valdez Gold (ASE) has transferred, to Cambior, its 25% interest in the Valdez Creek Placer property in Alaska. In return, Cambior will forgive an outstanding gold loan and other obligations incurred from the placer operation. As part of the transaction, Valdez’s parent, MVP Capital (TSE), will issue 15 million MVP shares to Cambior.