Conquistador to buy into Marmato

A subsidiary of Conquistador Mines (CQL-V) will acquire a 50.1% interest in the Colombian company that owns the Marmato gold property.

The subsidiary, Corona Goldfields, of which Conquistador owns half, will acquire its interest in Mineros Nacionales in return for spending a minimum of US$2.1 million on exploration and development over three years. In addition, Corona must submit, within four years, a feasibility study showing a deposit worth at least US$14 million.

Within 90 days of the study’s completion, Mineros Nacionales will have a 1-time option to require Corona to purchase up to 49.9% of its remaining shares, based on a scaled buy-out of each percentage point of interest.

A proven and probable, recoverable reserve of fewer than 2 million oz. gold would cost Corona US$155,000 for each percentage point. If the reserve is between 2 million and 5 million oz., the price tag would be US$205,000 for each point. If it is more than 5 million oz., each percentage point would cost US$255,000.

The 830-ha property hosts a producing underground gold mine, operated by Mineros Nacionales at an annual production rate of 10,000-15,000 oz.

When the underground mine started up, more than two years ago, geological reserves were estimated to be 754,000 tonnes grading 7.83 grams gold and 34 grams silver per tonne. An additional potential resource was estimated at 1 million tonnes grading 5-7 grams gold.

Corona Goldfields believes the property has potential for hosting a large, bulk-minable deposit.

Mineros Nacionales is owned 48.25% by Gran Colombia Resources (GCRI-C), which, either through leases or direct ownership, controls 128 concessions totalling 266,000 ha in the Marmato district.