N.A. Rare/Dundee Palliser close to Vezza gold deal

After months of negotiations, Kennco Explorations has agreed in principle to sell for cash its right to earn a 30% interest in the property. Under a previous agreement, the B.P. Minerals America subsidiary had the right to earn its interest by putting up 42.8% of the $6 million spent on the property so far.

With drill-indicated reserves now standing at 2 million tons grading 0.161 oz gold per ton North American and Dundee have been looking around for someone to finance underground exploration at Vezza.

Agnico-Eagle Mines (TSE) had offered to fund a $12 million program in return for a 50% interest and discussions involving the Vezza partnership and Noranda Explorations have also taken place.

But an agreement which gave Kennco the right to exercise its option during a 2-month period starting on Sept 30 has been a stumbling block in those discussions.

“When the deal is signed we will buy out all their interests,” said Hawkins, who is still waiting for approval from Kennco’s lawyers.

While results from the Main zone suggest that it is open below 1,700 ft, no decision has been made on whether the Vezza joint venture will conduct an underground program via a decline or shaft.

Hawkins wasn’t prepared to speculate on what the most likely scenario will be. But in the interim, North American Rare has reached an agreement that will give the company a much larger land position around Matagami Lake. When the deal is complete, North American will have interests in a group of 1,100 claims located just east of Vezza Twp.

Hawkins considers them important because they are thought to contain remnants of the same iron formation which host the Main gold zone at Vezza. Assay results from holes drilled to a depth of 1,700 ft on the Main zone include 22.6 ft of 0.20 oz and 9.1 ft of 0.21.

North American Rare is controlled (28%) by Tandem Resources’ (ME) which has resumed drilling at the Moss Lake gold project 70 miles west of Thunder Bay, Ont. The project is 50%/50% joint venture involving Storimin Exploration (ASE) of Toronto.

With 150,000 ft of drilling and over 3,000 ft of ramping completed in earlier campaigns, the latest program is designed to investigate areas both east and west of the Main zone where it is still open.

In a bid to establish a Moss reserve inventory, Tandem is assessing the overall results of previous surface and underground programs.

“The possibility of mining a large tonnage and lower grade situation is also being investigated,” said Hawkins.

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