According to a recent joint venture agreement, a unit of FMC Gold (NYSE) is about to begin an exploration program on a gold prospect held by Vera Cruz Minerals (VSE) near Carrizozo in Lincoln Cty., N.M.
Previous work on the property by Vera Cruz returned a number of impressive drilling results but interest in the property was dampened after a due diligence review by a prospective joint venture partner showed discrepancies in assay values attributed to nugget effect.
FMC now has the right to earn a 51% interest in the property by spending US$2 million within four years, and a further 9% interest after the joint venture is in place by spending an additional US$800,000.
The agreement also provides for Vera Cruz to be reimbursed for the 1991 property payments and obligations, along with US$105,000 in payments over the next two years.
A spokesman from Vera Cruz said FMC carried out a comprehensive due diligence review before entering into the joint venture agreement. The two companies agreed to an initial exploration program costing a minimum of US$210,000. FMC will operate the exploration program which includes geophysics and core drilling.
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