Vancouver – Following an amendment of its earn-in agreement, Buffalo Gold (BUF.U-V, BYBUF-O) has acquired a 60% interest in the Mt. Kare gold project in Papua New Guinea from project partner Madison Minerals (MMR-V, MMRSF-O).
In an effort to complete a preliminary economic feasibility study, Buffalo Gold had focused most of its recent work on infill drilling of known mineralization mostly at the Western Roscoelite zone. Meanwhile, some its other exploration work has indicated strong potential for significant gold mineralization beyond these known zones.
Accordingly, the joint venture partners plan to defer the preliminary feasibility study until enough peripheral exploration work is completed to determine the potential extent of further mineralization.
Under the new plan, Buffalos earn-in terms were changed to immediately give it a 60% interest in the property by issuing $500,000 in cash (or shares) plus 3 million shares to Madison. By completing a bankable feasibility study within four years, Buffalo can boost its interest to 75% with an acquisition clause to purchase the balance of Madisons interest based on an independent valuation.
A resource estimate at Mt. Kare conducted in 2000 reviewed 14.68 million indicated tonnes grading 2.36 grams gold per tonne and 33.7 grams silver per tonne plus an additional 10.85 million inferred tonnes at 1.98 grams gold and 22.7 grams silver using a 1 gram gold equivalent cut-off and cutting all high grade assays to 30 grams gold.
Mt. Kare is adjacent to Barrick Golds (ABX-T, ABX-N) 75%-owned Porgera mine that produced 542,000 oz. gold in 2006 at total cash costs of US$315 per oz.