A deadline to complete $400,000 of feasibility-related expenditures at the Keystone joint venture at Lynn Lake, Man., was recently extended to March 31, 1993, from the end of 1992.
The deadline is part of an agreement giving Cazador Explorations (VSE) the right to earn a 49% interest in the Keystone project from DCC Equities by spending a total of $10 million.
The deal is also subject to Cazador completing the acquisition of a 49% interest in the BT property from Trans America Industries (VSE). The other 51% of the BT property is already owned by the Keystone joint venture. To complete the purchase of the BT property, Cazador must pay Trans America a total of $500,000 by March 30 plus a further $500,000 and 400,000 common shares by June 30, 1993.
The joint venture has filed an application with the Manitoba government for a mining permit for the BT gold deposit and feasibility work on the project is continuing.
John Chapman, president of Cazador, said permits are already in place for the old MacLellan underground operation as well as the Lynn mill, but a full Environment Impact Study is required for the proposed BT open pit operation. Chapman hopes to receive full permits for the project by May and, if funding can be arranged immediately, the project could be in operation in August. Preliminary estimates put the required startup cost at about $8 million, including the purchase price of the BT deposit interest and $1.1 million in working capital.
Cazador has not released a reserve estimate for the BT deposit although it is expected to last for at least three years at an operating rate of 1,000 tonnes per day.
Operating plans call for supplementing the open pit production with underground mining from the MacLellan mine.
Chapman said the feasibility study should be complete by the third week of January when additional operating statistics will be available.
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