After completing over $2.5 million in expenditures on the Inel property, Avondale Resources (VSE) has elected to terminate its option agreement with Gulf International Minerals (VSE). Under the terms of the option agreement, Avondale was required to make a minimum expenditure of $2.5 million on the property in 1990. The company could earn a 50% interest in the Inel project from Gulf by spending a total of $10 million over a 4-year period.
This year’s program included underground drifting to establish drill stations, followed by drilling designed to test the extent of the AK zone.
Although the drilling produced some excellent results, including one intersection of 24.3 ft. grading 1.19 oz. gold and 1.4 oz. silver per ton plus 0.87% zinc, the zone was not continuous.
Gulf believes the zone was displaced by a fault and was in the process of drilling a hole to test this theory when the program was shut down by unstable snow conditions in the area.
Reg Davis, president of Gulf, said the company is looking for a new partner to fund further work on the property. He stressed the company intends to continue its exploration program next spring, with or without a partner.
Gulf currently has close to $1.5 million in working capital.
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