According to a recent letter of intent agreement, Brush Creek Mining (NASDAQ) and MK Gold, the mining subsidiary of Morrison Knudsen, plan to join forces to explore and develop gold properties in Russia and other parts of the Commonwealth of Independent States (CIS).
California-based Brush Creek reports that the properties host proven and probable reserves of over 20 million oz. gold, based on geological data from previous drilling and underground development by various state agencies. Several more properties are being reviewed, and both gold and base metal properties will be considered.
The new company will be owned 50% by Brush Creek, the exploration arm, while 50% owner MK will provide engineering and construction services as well as mining.
“This is very positive for both companies, and is the first step in facilitating the development of our projects in Russia and the CIS which, in my opinion, hold some of the best opportunities that exist in the world today,” commented Steven Chi, executive vice-president of MK Gold. The companies already have “agreements of cooperation” with governmental agencies in the former Soviet Union for the five gold properties, considered a first step toward a definitive joint venture.
Brush Creek Chairman James Anderson will be named chairman of the new company, and in charge of raising $25 million in working capital with the help of MK and Brush Creek.
A more definitive agreement, which is expected shortly, will set out the specifics of the new company.
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