Vannessa releases details of Las Cristinas deal (July 30, 2001)

Junior Vannessa Ventures (VVV-V) has purchased a 95% interest in the Las Cristinas gold project in Venezuela for a “nominal” amount of cash and the assumption of the project debt owed to vendor Placer Dome (PDG-T).

Placer sold off its interest in Minera Las Cristinas, the operating company formed by Placer and Venezuelan state enterprise Corporacion Venezolana de Guayana, to Vannessa in mid-July. Vannessa’s total interest in the project will be 95%.

At the same time, the major retains a 2% net smelter return on Vannessa’s portion of copper revenues from the project and a net smelter return on Vannessa’s share of the gold revenues. This starts at 1% if the gold price is below US$276 per oz., moves up to 3% if the gold price is between US$276 and US$350, and runs to 5% if gold goes over US$350.

Placer also has a retained back-in right, which kicks in if a bankable feasibility study shows a 250,000-oz.-per-year gold mine is profitable. The right can be exercised for Vannessa’s capital costs and “pre-production soft costs,” plus 10%. Vannessa would then be entitled to 2% of Placer Dome’s net smelter return on gold and copper production — provided it has spent a minimum of US$2 million in capital costs on the project and maintained the mining rights for more than a year.

Vannessa is looking at the possibility of a 100,000-oz.-per-year mine, a much smaller operation than had been planned by Placer. The junior estimates that a project on that scale, which would only exploit near-surface mineralization, would cost between US$35 million and US$50 million to go into production.