Vancouver — Southwestern Resources (SWG-T) has inked a deal with the Chengdu Institute of Environmental Geology and Mineral Resources Development to jointly explore two areas that span 900 sq. km, in the Yunnan province, China.
Southwestern states that the majority of the 900 sq. km area is open and the partners have submitted exploration concession applications for 330 sq. km of ground with a further 570 sq. km to be applied for immediately.
The under explored areas are situated northwest of the company’s Boka Gold project and host numerous copper-gold and gold occurrences with similar geology and mineralization style as at Boka.
According to the terms of the agreement, Southwestern said it will initially evaluate the areas and form a sino-foreign joint venture cooperative company with Chengdu. Once formed, Southwestern will be required to contribute US$2 million during the first two years and it will own 70% of the cooperative company. Chengdu will own the remainder. Southwestern can earn a further 10% interest by contributing an additional US$1 million in the third year. Thereafter contributions to the cooperative company will be made pro rata.
If Chengdu doesn’t contribute its share, then Southwestern has the right to earn a further 10% by completing a feasibility study on one deposit.
Meanwhile, at the Boka project, Southwestern has three drill rigs spinning and plans to add two more in order to quickly evaluate a 5.5 km-long prospective gold zone.
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