Cazador’s option on BT extended

VSE-listed Cazador Exploration’s option to acquire 49% of the BT gold deposit near Lynn Lake, Man., has been extended, giving it breathing room to fulfil its commitments to the Keystone joint venture.

A $1-million advanced royalty payment on the BT property was due to Trans America Industries (VSE) by June 30 but is now rescheduled as six monthly payments. The first two payments will be $100,000 each, increasing to $200,000 each for the other four.

The remaining 51% interest in BT is owned by the Keystone joint venture. As part of a 49% earn-in agreement on that joint venture, Cazador must acquire the remaining interest in BT and spend $10 million to bring Keystone into production.

Including the $1-million purchase price for the BT interest, the capital cost to get the project going is estimated at $7.9 million.

Keystone is owned by DCC Equities which, in turn, recently granted Black Hawk Mining (TSE) the right to buy its interest (see “Black Hawk buying Keystone,” T.N.M., June 14/93).

BT contains an estimated open-pit reserve of 1.36 million tons grading 0.083 oz. gold per ton. Based on production of 579,000 tons per year, output is estimated at 42,000 oz. gold per year at a cash cost of US$203 per oz. Cazador has started rehabilitating a haul road between BT and Keystone’s MacLellan mill and is completing its financing arrangements. All but about $3 million of the estimated $7.9-million capital cost has been arranged, said Cazador President John Chapman.