Quinto closes funding deal with investment syndicate

A previously announced funding agreement between Quinto Mining (VSE) and a U.S. investment syndicate was recently finalized.

In return for $4 million in funding, the syndicate will earn a 50% interest in Quinto’s Lumby property in south-central British Columbia. The funding totals $3.55 million in staged cash payments to Dec. 16, 1993, and an aggregate of $450,000 in private placements.

Quinto reports that escrow funds have been released for the first payment. The company also entered an agreement with a European group for a US$2-million gold loan. Quinto plans to use the American funding to rehabilitate a 200-ton-per-day mill at the property and complete additional development work, as well as mine and mill a 5,000-ton bulk sample. Between 1984 and 1987, Quinto completed 33,000 ft. of drilling on the property, outlining a preliminary reserve of about 500,000 tons grading 0.13 oz. gold per ton. The reserve is hosted in a steeply dipping quartz vein which in turn is contained within a wide shear zone.

The shear, estimated to average about 50 ft. in width, is comprised of massive carbon graphite with areas of quartz veining and 10-12% pyrite throughout the shear. By processing a bulk sample, the company hopes to prove that the entire graphite shear is mineralized with gold. Previous gold assaying on the graphite material returned conflicting results. President Paul Schiller said the cost of the program is not expected to exceed $1.5 million, leaving ample funds for further mill expansion and exploration on other areas of the property. If the program is successful, the company plans to expand the plant to handle up to 3,000 tons per day. Quinto is also studying the potential of producing a graphite product at the operation. Permits are in place for a 200-ton-per-day pilot operation and Quinto expects to expand existing development work in the new year to reach the bulk sample. The company hopes to have the pilot mill in operation by next spring.