Metallica options Frida concession

An option agreement has been signed, affecting the Frida gold concession in southeastern Venezuela.

Over a 30-month period, Metallica Resources (CDN) can buy all the shares of vendor Minera Sabine for US$3 million.

The agreement is subject to Sabine obtaining an extension of the concession agreement with Corporacion Venezolana de Guyana. That company has indicated there are three delinquent items concerning this extension, and Sabine has been given 90 days to remedy the situation. Metallica has agreed to undertake these tasks as part of its work program.

The concession lies 15 km northwest of Placer Dome’s (TSE) Las Cristinas project, in Bolivar state.

Metallica is carrying out a US$300,000 program which began with the preparation of a topographic map. Once the extention is approved, the company will begin line cutting, ground geophysical surveys, geochemical sampling and geological mapping.

Metallica has also reached an agreement with Venezuelan Goldfields (VSE) on properties within the Kilometre 88 area, including the Frida concession. Vengold will have a 60-day, one-time first right to develop or buy an interest in Frida, should Metallica choose to sell all or part of its interest.

If Metallica delivers a preliminary feasibility study to Vengold, the latter would have the right to earn a half interest and become the operator. To do so, it would have to reimburse Metallica for its prior expenditures and agree to pay development costs.

Should Metallica decide to sell or joint-venture its interest, Vengold would have a one-time right to accept Metallica’s terms of sale.