River Gold buys Mishi

River Gold Mines (RIV-T) has acquired the Mishi Lake gold deposit near Wawa, Ont.

The vendors, MacMillan Gold (MMG-T) and Mishibishu Gold (MGO-V), held 40% and 60% interests, respectively.

River’s cost for the portion of the property that contains the known gold resource will be $1.4 million, provided it mines more than 700,000 tonnes from the deposit.

MacMillan and Mishibishu will retain their joint interests in some 300 claims and two mining leases at Mishi Lake. In addition, they are entitled to royalties of $1 per tonne for any production in excess of 700,000 tonnes mined from an open pit and $2 per tonne for any material extracted using underground methods.

The property, which covers 13 km of the Mishibishu Lake deformation zone, is only 2 km from River’s mill, which is currently processing 750 tonnes of ore per day from River’s Eagle River mine. Periodically, the mill also processes ore mined by River at the nearby Edwards gold mine of VenCan Gold (VCG-M).

Based on drilling completed in 1989, the Mishi main zone contains combined open-pit and underground reserves of 1.4 million tonnes grading 4.26 grams gold per tonne.