Partners propose for Salamandra

Already working on earning a half-interest in the Salamandra property in Mexico’s Senora state, Alamos Minerals (AAS-V) has begun talks aimed at merging with partner National Gold (NGT-V).

The two hope the move will create enough economic efficiencies to allow for the development of the property, and facilitate financing for the project on more favourable terms. The property is slated to undergo an independent evaluation.

Alamos has provided a $675,000 loan to National Gold by way of a one-year convertible note with interest payable at 1% per month. The note can be converted at any time into National Gold shares at a conversion price of 29 per share, and is redeemable at National Gold’s option on 30 days notice. The loan is earmarked for requirements under National’s agreement to acquire the property.

Once the loan is converted into shares, Alamos can appoint three directors to National’s board.

The companies recently met a $1.5-million due on the property.

The two have also agreed that Alamos has met its development expenditures under its option on a half-interest in the project.

A recently tabled scoping study at Salamandra suggests that, even at US$300 per oz. gold, the Estrella zone, part of the large Mulatos deposit, can be profitably mined. The study envisages annual production of 100,000 oz. gold over 12 years. Average cash operating costs are pegged at US$169 per oz., with initial capital costs amounting to US$34 per oz.

At US$300 per oz. gold, the proposed Estrella pit contains a measured and indicated resource of 32 million tonnes running 1.77 grams gold. At last count, the total Mulatos deposit contained a measured resource of 43.9 million tonnes grading 1.66 grams gold, plus an indicated resource of 13.1 million tonnes at 1.4 grams gold and a inferred portion of 12.3 million tonnes at 1.37 grams gold.

The Salamandra property sits within the famed Sierra Madre gold belt and is 400 km south of Tucson, Ariz., and 220 km east of Hermosillo, the capital of Sonora state.