Energold to reacquire 100% of Longyear

Under a proposed agreement with Eldorado Gold (ELD-T), due to close in late November, Energold Mining (EGD-V) will reacquire the Longyear gold concession in the Dominican Republic.

Energold currently holds a 49% interest and is the operator. Eldorado had been earning a 51% interest by funding all exploration expenditures through to a positive feasibility study and by making semi-annual payments to Energold totalling $2 million over four years.

Eldorado has agreed to relinquish its 51% interest to Energold and, on closing, will pay that company a further $175,000 in cash and issue 150,000 of its shares. Eldorado is also required to deliver an interest-bearing $500,000 promissory note due Oct. 1, 2001, and to reimburse Energold for the costs incurred during the first phase of exploration.

The Longyear concession adjoins the large Pueblo Viejo gold-silver mine to the southwest. The state-owned mine is believed to contain a sulphide resource in the order of 200 million tonnes at an average grade of 3 grams gold, equivalent to about 20 million oz. The oxidized portion of Pueblo Viejo has been mined by open-pit methods since 1975, resulting in more than 5 million oz. gold and 72 million oz. silver. The oxide reserves are now virtually depleted.

Energold has defined a prominent gold-in-soils anomaly measuring 550 by 750 metres on the Longyear property. This prospect lies some 3.5 km southwest of the Moore and Monte Negro deposits at Pueblo Viejo.

One hundred and sixty-five outcrop, pit and trench samples were collected from an area measuring 300 by 700 metres in the centre of the soil anomaly. These average in excess of 1 gram gold per tonne.

Energold is carrying out a trenching program to define the grade and extent of near-surface oxide mineralization in preparation for drilling, scheduled to begin early next year.

In related news, Energold has purchased Minera Hispaniola from Battle Mountain Gold (BMC-T) and Canyon Resources (CAU-X). The terms of the purchase, which were substantially reduced from those of the original agreement signed in April 1995, include: a purchase price of US$100,000; payments of US$250,000 in each of the first two years of commercial production from the first property Energold places into production; and 1% net smelter return royalties to a maximum aggregate amount of either US$1 million or $2 million on certain groups of properties.

Hispaniola is the holder of the Centenario exploration concession application, as well as the Majagual, Lechoso, Los Pedregones and San Antonio I exploration concessions, which cover a total of 19,900 ha in the Dominican Republic.

Energold has 14.3 million shares outstanding and is sitting on more than $2 million in its treasury.