Exall Resources (TSE) has agreed to pay Hemlo Gold Mines (TSE) $3.1 million for its 60% controlling interest in the Hislop-Beatty gold property east of Timmins, Ont.
Along with the cash payment, Hemlo will receive a sliding-scale net smelter return royalty tied to the price of gold.
The property includes the Hislop-Beatty gold deposit, which has a drill-indicated resource of 1,342,939 tonnes averaging 10.2 grams gold per tonne to a depth of 250 metres. The resource was delineated with 142 drill holes completed on 25- and 50-metre centres totalling 27,873 metres. In addition, exploration suggests there is good potential at depth. One hole, drilled to a depth of 400 metres, intersected a 4-metre interval that assayed 9.64 grams gold.
Exall will proceed with a mine development program, in which mining contractors will gain access to mineralization using a decline ramp. The plan calls for ore to be custom milled. If all goes well, Exall and 40% partner Glimmer Resources (VSE) should be receiving cash flow from the mine by the fourth quarter of 1996.
The purchase is expected to close by April 1, 1996, and will be financed through a combination of equity and debt.