Callahan can earn its interest by spending $2 million on exploration during the next 15 months. For an additional expenditure of $1 million, the company can increase its interest to 60%.
Previous work by Shenandoah outlined reserves of 500,000 tons grading 0.32 oz gold per ton in the No 1 vein. However, little drill data has ever been released by Shenandoah to support this reserve estimate. Considerable work will have to be completed in order to substantiate Shenandoah’s calculations.
Callahan plans to spend $200,000 within the next six months drilling and bulk sampling the zone. The company has also purchased 125,000 shares of Shenandoah for $100,000(US). Shenandoah will also make available $100,000 for exploration within the first six months of the venture.
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