Rea set to acquire Nevada gold project

A letter of intent gives Rea Gold (TSE) a purchase option on the Mt. Hamilton gold project in eastern Nevada.

The option is part of an agreement with owner Costain Minerals. In return, Rea must pay Costain US$200,000 per quarter during the 1-year option period. Rea can buy the property for US$5.25 million, with Costain retaining a 2% net smelter return capped at US$2 million.

Minable reserves are estimated at 9 million tons grading 0.052 oz. gold per ton in two deposits.

Rea plans to start work on a due diligence review immediately. If the review is successful, the company could put the project into production as early as the present third quarter.