Chutine Resources (VSE) has acquired an option to buy a 49% interest in a Mexican mining company which owns several gold, silver and copper deposits in Sonora state. Chutine will issue up to 17 million common shares at a deemed price of 18 per share in consideration of the option. The vendor is American Resources, a limited partnership based in the U.S.
Chutine must pay $900,000(US) to exercise the option. The cash is expected to come from private placements of Chutine shares. The main asset in the property portfolio is the Luz del Cobre copper deposit which has been the subject of a pre-feasibility study. Both partners are proceeding to obtain the needed financing for the project. Mining is expected to begin in 1989.
Open pit heap leaching of known oxide gold reserves is also being planned for next year. A probable and possible reserve of 720,000 tonnes grading 0.08 oz gold per ton is estimated by the company’s consultants. The heap leach program will enable the operating mill on site to process higher grading sulphide gold ore known to underlie the oxide material, Chutine says.
As a result of the deal, Chutine plans to amalgamate on a basis of one new share for each five shares held. The company will be renamed American Mineral Resources. The changes are conditional on the company exercising its option sometime in the first quarter of 1989.
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