Vancouver-based Canada Tungsten (TSE), together with its subsidiaries, is selling its interests in the Kremzar gold mine to Van Ollie Explorations (CDN) and three partners.
The mine, 40 km northeast of Wawa, Ont., has proven and probable minable reserves of 187,972 tonnes grading 6.6 grams per tonne in one zone and 118,782 tonnes averaging 7.2 grams in another.
Included in the purchase agreement is a 500-ton-per-day carbon-in-pulp mill which is currently idle.
The purchase price for the mine and mill is $2.5 million, of which $500,000 has already been paid. Tungsten will retain a 2.5% net smelter return (NSR) royalty on gold produced up to 244,000 oz., and 3% thereafter. If a new orebody is discovered outside the defined zones, Tungsten can elect to earn a 40% interest in the orebody by paying $500,000 and funding half of the costs incurred in its discovery.
In addition, Tungsten can earn a 1.5% NSR on gold produced from the mill. In other news, Van Ollie and its partners are planning to amalgamate. A special meeting of Van Ollie’s shareholders will be called and, if approved, one new share will be exchanged for four outstanding Van Ollie shares.
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