Laramide leases gold deposit (December 18, 2002)

In exchange for cash and future royalties, Laramide Resources (LAM-V) has leased its Cerro Colorado mining claims in Mexico to a private Australian mining company.

Secotec paid US$50,000 in cash and has agreed to pay a 2% or 2.5% net smelter return royalty on the first 100,000 ounces of production. The exact amount of the royalty depends on whether gold is trading above or below US$350 per oz., and it increases by 0.5% on any subsequent production.

As part of the deal, Laramide can purchase 10% of Secotec’s shares from Mexico Mining Investments should the company pursue a reverse takeover, be sold, publicly listed or initiate a similar “liquidity event” over the next two years. The price is fixed at US$500,000.

Secotec currently operates a small placer mine, about 10 km from Cerro Colorado. The operation cranks out about 10,000 ounces annually.

Secotec already has the necessary permits to operate an open-pit, heap-leach operation at Cerro Colorado and thus expects to pour the first dore bar in a matter of months. Production is expected to vary between 20,000 and 25,000 ounces per year.

Resources are pegged at 6 million tonnes grading 1.5 grams gold per tonne.