Under an agreement with Minera Australiana Cia, Toronto-listed Black Swan Gold Mines can acquire a half interest in the Zaruma property in southwestern Ecuador.
Between 1892 and 1950, South American Development Co. produced about 3 million oz. gold from high-grade quartz veins in the southern portion of the district.
The property is at the northern end of the Zaruma-Portovelo mining district. The agreement also gives Black Swan a half interest in a gold processing plant which should start production within three months. Initial capacity will be 110 tons per day of tailings sand which can be bought from operations in the area. At this rate, output is projected to be 6,000 oz. per year at a cost of less than US$200 per oz.
The joint venture plans to expand capacity of the plant after a trial period and add a crushing and grinding circuit to allow processing of run-of-mine ore.
To earn the interest, Black Swan will initially pay US$100,000 cash, a further US$100,000 after a 60-day due diligence period and US$150,000 plus 8 million common shares after four months.
It must also spend US$2 million on exploration and development, including work on the milling operation.
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