A joint venture agreement aimed at aquiring the financing required to place the Eastmain gold deposit in northern Quebec near James Bay into production has been signed by MSV Resources (ME) and Meston Lake Resources, a unit of Campbell Resources (TSE)
The deposit has proven and probable reserves of 952,374 tons grading 0.35 oz. gold per ton, MSV President Mario Caron said. Additional tonnage is possible. MSV, sole owner of Eastmain, is 33.1% owned by Northgate Exploration (TSE) which also has a 20% interest in Campbell.
Startup for the mining project could be as early as Jan. 1, 1992.
The agreement will allow Meston to earn a 50% interest in the Eastmain project. To earn that interest, Meston must pay $250,000 by March 1, 1991; provide a Campbell-owned milling facility in Chibougamau, Que.; provide $2 million on closing of third-party financing; try to provide margin support as required for joint venture hedging contracts; and loan $2 million to MSV.
MSV has agreed to provide $2 million on closing of third-party financing; to arrange a pre-production gold loan of 20,000-25,000 oz.; to arrange $3 -4 million in financing to be secured against future Quebec mining tax credits; and to obtain Quebec government assistance with respect to a winter road.
MSV recently announced a $1.7-million grant from the Quebec government for construction of a winter road to the project site. Eastmain is currently undergoing an enviromental study and detailed engineering.
The Eastmain project sits 185 miles northeast of Chibougamau.
Meston operates the Joe Mann gold mine 40 miles south of Chibougamau; the Mann mine is being expanded to produce at a rate of 100,000 oz. per year by 1992.
Because no milling facilities will be required on site, it is estimated about $17 million will be needed to place the Eastman project into production.
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