Placer Dome options X-Cal’s Mill Creek

Vancouver — A unit of Placer Dome (PDG-T) has entered into a 6-month option agreement to drill-test the Mill Creek gold property in Nevada. The property is held by X-Cal Resources (XCL-T).

Placer Dome can acquire the property for US$5 million, with X-Cal retaining a 1.5% net smelter return royalty (NSR).

Results from a US$1-million work program last year confirmed an environment of favourable geology. Gold-bearing lower-plate rocks are present on the 1-sq.-mile property, which is near Placer Dome’s Cortez mining complex.

The gold miner has a 60% interest in the Cortez complex, while a unit of Rio Tinto (RTP-N) holds the balance. The deposits feeding Cortez are expected to produce more than 10 million oz. gold over 20 years, from 1997 to 2016.

X-Cal has other gold properties in Nevada, including a half-stake in the past-producing Sleeper gold mine in Humboldt Cty. The company and partner New Sleeper Gold (NWS-V) began a US$5-million program of exploration there this year.