Following the recent completion of an infill drilling program on the Pend Oreille property in Washington state, operator Minnova (TSE) estimates probable reserves at about 3.8 million tons grading 10.7% zinc and 1.8% lead.
The figure compares well with previous estimates made by property owner RFC Resource Finance (TSE).
Minnova’s work on the property is part of a program to evaluate the purchase of a 46% controlling interest in RFC from Kerr Addison Mines (TSE). Under an option deal signed earlier this year, Minnova can purchase Kerr Addison’s 4,627,657 shares of RFC at 44.3 cents per share.
Minnova is proceeding with a study to develop a mining concept and mining cost estimate for the deposit as well as an environmental review to evaluate permitting requirements.
The company expects to complete the studies by mid-August when it will make a decision on the exercise of the purchase option.
RFC currently owes Kerr Addison about $3.1 million which, under the purchase agreement with Minnova, will be converted into a 3% net smelter return in favor of Kerr Addison up to a maximum of $3.5 million.
Incidentally, Kerr Addison owns a 50.4% stake in Minnova which it recently agreed to sell to Metall Mining (TSE) for $136.6 million.
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