Black Hawk eliminates debt

Black Hawk Mining (BHK-T) has liquidated its put options to repay a debt owed to Standard Bank. The miner had the right to sell 81,000 oz. at US$261 per oz.

The puts were bought in early 2000 to cover calls sold to others and ensure that the interest on the loan could be paid. Calls for 95,720 oz. remain outstanding, and will expire monthly over the next 22 months. The average strike price is US$272 per oz.

Black Hawk operates the Nicaraguan gold mine known as El Limon, where a record 90,829 oz. were produced in 2000. Another 10,303 oz. were pulled from stockpiles at the depleted Keystone deposit in northern Manitoba.

Combined cash costs were US$173 per oz.

Black Hawk also owns an 80% interest in the Manantial Espejo silver-gold project in Argentina, though it has granted Silver Standard Resources (SSO-V) the right to acquire half of that in return for paying US$1.5 million and spending US$4.5 million on exploration by 2002 (extendable to 2003 under certain conditions).

Discovered in 1989, Manantial Espejo has gone on to reveal a resource of 7.9 million tonnes grading 179 grams silver and 2.9 grams gold. The estimate, including 5,000 metres of infill drilling completed earlier this year, is being reviewed by consulting firm Pincock Allen & Holt.

The remaining interest in Manatial Espejo is held by Barrick Gold (ABX-T). Upon receiving a feasibility study, the major must elect either to sell its interest to Black Hawk or double it.

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