Cambior (TSE) has entered into an option agreement with Nuinsco Resources (TSE) under which the gold producer will earn a 51% interest in the Cameron Lake gold property, 80 km southeast of Kenora, Ont.
Cambior will spend $1.5 million in the next year on drilling in the levels between 1,000 and 2,500 ft. After the program is complete, Cambior can incur $15.6 million in preproduction expenses to earn its 51% share. The option period will extend to the beginning of commercial production, with a maximum length of four years. Cambior will recover $15 million in capital costs from 90% of cash flow after production begins.
The Cameron Lake deposit has a total proven, probable and possible reserve of 3.2 million tons grading 0.17 oz. gold per ton. Nuinsco believes taking a lower cutoff grade (0.05 oz. per ton) will increase the recoverable reserves.
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