Midland Energy to acquire Rayrock’s Latin prospects

Midland Energy Corp. of Vancouver will quadruple the value of its ore reserves and increase its exposure to Third World mining by acquiring Rayrock Yellowknife Resources’ Chilean, Ecuadorian and Costa Rican projects.

According to Midland, the acquisitions will boost the value of its reserves from $132 million to $550 million and extend its involvement to include operating control of a developing high grade copper mine.

Midland says it will also assume operating control of the Bellavista/ Montezuma gold mine project in Costa Rica where a drill program is attempting to prove up reserves of seven million tons grading 0.10 oz gold per ton.

Under the agreement, Midland will acquire Rayrock’s 30% interest in the Bellavista/Montezuma joint- venture by issuing 5,280,255 shares to Rayrock. As operator, Midland will now hold a 60% working interest in the project.

Midland will also issue 2,601,346 shares at $2 per share to obtain Rayrock’s Chilean and Ecuadorean interests. Drill-indicated reserves at the Ivan Copper mine in Chile, stand at 1.83 million tons grading 4% copper and 0.5 oz silver per ton.

With 1.2 million tons of possible reserves making a seven to 8-year mine life likely, Midland says the project could be in production by 1990.

According to the company, total capital cost at Ivan, including working capital, for a 1,100 tpd operation is estimated at $15 million(US).

When the agreement is complete, Rayrock will hold over 55% of Midland’s outstanding shares and a new board of directors will consist of four Rayrock nominees and three from Midland.