Funding for further development and exploration of the Robertson gold property in Lander Cty., Nev., owned by Coral Gold (TSE), appears to be close at hand.
Amax Gold (NYSE) has signed a letter of intent which, if carried through to a definitive agreement, would allow Amax the right to earn a 60% interest in the property by funding a 4-phase exploration and development program. Coral expects a final agreement to be signed by Feb. 1.
Expenditures totalling approximately US$1 million for the first phase of the program will be paid by Coral Gold. Following the signing of a definitive agreement, the company plans to raise US$3 million through a private placement. Amax has agreed to subscribe for one-third of the placement, effect ively guaranteeing Coral’s funding for the phase-one program.
Amax’s interest in the property is reported to be directed at its deep sulphide potential. Plans for the first phase of work include spending 75% of the funds to test sulphide targets to depths of up to 2,500 ft. The balance of the budget will be directed at exploring near-surface oxide zones.
Amax will earn a 60% interest in the Robertson property by spending up to US$10.5 million on three further phases of exploration and development, including the preparation of a bankable feasibility study and arrangement of project financing. Coral Gold has the option of reverting to a 30% carried interest.
The Robertson mine has been the source of many problems for Coral Gold. The heap leach operation encountered higher stripping ratios than expected, lower grades, and various operating problems which resulted in the suspension of mining operations last year.
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