Consolidated Ramrod Gold (TSE) will sell a half interest in its Damoti Lake gold project, north of Yellowknife, N.W.T., to a California-based junior.
In return, Canadian American Resource will pay US$12 million over two years.
This past fall, Ramrod Gold acquired sole ownership of Damoti Lake by buying out partners Gitennes Exploration and Athabaska Gold Resources.
Of the US$12 million it will receive from Canadian American, US$7.2 million is earmarked for drilling and exploration, to begin next summer. The remainder will serve to finance licence fees and overhead expenses.
Damoti Lake is a banded iron formation with 10 gold-bearing zones identified over a length of 7.5 miles. Ramrod has outlined a preliminary, drill-indicated resource of 600,000 oz. contained in four separate zones.
The company recently drilled eight holes in the first part of a winter drilling program. Among the results are: 9.5 ft. of 0.3 oz. gold per ton for hole 95-209; 4.7 ft. of 0.52 oz. for 95-211; 6.2 ft. of 0.36 oz. plus 3.3 ft. of 0.74 oz. for 95-212; and 4 ft. of 0.47 oz. for 95-213. The holes were drilled from four sites on the Red Mountain-Lookout zones.
Drilling is set to resume, with an additional 22 holes planned.
Ramrod has 33 million shares outstanding.
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