Under an agreement with Mongolrostsvetmet, a Mongolian-Russian joint venture, Dentonia Resources (VSE) can earn an initial 70% interest in the Asgat silver-copper property by placing it in production.
Situated in Mongolia, the property contains proven and probable reserves estimated at 9.3 million tons grading 10 oz. silver per ton, plus 1% copper, 0.44% antimony and 0.05% bismuth. Mineralization is hosted in quartz veins over an average width of 2 to 3 metres. Of 14 zones identified, only two are explored in any detail.
An initial payment of US$10,000 allows Dentonia the right to launch a due diligence review at a minimum cost of US$250,000, to be completed no later than Aug. 31. Meanwhile, a prefeasibility evaluation is due within six weeks. Dentonia plans to carry out a summer program of check sampling and metallurgical tests. Preliminary tests indicate silver and copper recoveries in the 90% range.
If Dentonia elects to proceed with a full feasibility, it must complete it by Aug. 31, 1997, spending a minimum of US$2.5 million, with cash payments to Mongolrostsvetmet totalling US$150,000. Dentonia will then have three years to place the project in production, provided the study is positive. (If it is negative, the company will be able to extend the option for five years by making annual payments of US$100,000.)
After 10 years of production, Dentonia’s initial 70% interest reverts to 49%.
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