Korea Zinc takes share in Chief Consolidated

Asian smelting firm Korea Zinc has bought half a million unregistered shares of Chief Consolidated Mining (NASDAQ) in a private placement. The US$2-million transaction gives Korea Zinc 9.6% of the junior company.

Chief Consolidated has a half interest in the New Burgin polymetallic deposit in the Tintic district of central Utah. Akiko Gold Resources (VSE), which owns the other half, assigned its right to purchase the shares to Korea Zinc.

This deal with Chief Consolidated is part of a joint-venture agreement whereby Korea Zinc will invest US$5 million in the Burgin for half of Akiko’s 50% interest in the joint venture.

Korea Zinc will invest another US$2 million after the first US$2 million is spent, and another US$1 million into Akiko Gold upon completion of due diligence and execution of the joint-venture agreement.

Another US$4 million, necessary for development of the Burgin, is to come from both Akiko and Korea Zinc. The companies are currently exploring financial options.

New drill holes into the north-central part of the Burgin deposit encountered two stacked zones. The main, lower zone consists of 27 ft. of 26.8 oz. silver per ton, as well as 23% lead and 3.5% zinc from hole CB-14. Previously calculated reserves at the Burgin are 1.03 million tons containing 24 million oz. silver, 550 million lb. lead and 180 million lb. zinc. New reserve figures are expected in November.