Noranda options Camreco property

A letter of agreement has been entered into between Camreco (TSE) and Noranda Exploration, a unit of Noranda (TSE), whereby the latter may earn a 50% interest in the Goldlund gold property in northwestern Ontario. Noranda may earn its interest by spending a total of $5 million on the property during a 3-year period, including $400,000 in option payments.

The joint venture arrangement includes all of Camreco’s claims at Goldlund and about 81 claims owned by Noranda adjoining and abutting Camreco’s claims.

Once Noranda has spent the required funding, a joint venture would be set up with each party having a 50% interest. Subsequent expenditures would be on a 50/50 basis, with a party’s interest reduced on a pro rata basis if payments are not made.

If a party’s interest is reduced to 10%, then that party has the option of remaining at that level or converting its stake to a 2.5% net smelter interest.