Sheridan options Lithos moly play

Drilling is planned for a molybdenum property in Quebec following the conclusion of a deal between Lithos (ME) and financier Patrick Sheridan.

Lithos says the property, Mining Concession 391, contains the richest known molybdenum reserves in Quebec. Based on drilling work in 1969, geological reserves of 997,159 tons grading 0.271% MoS2 and 0.053% bismuth have been outlined.

The results of the drilling program, which will test for possible continuation at depth, will determine whether the partnership will invest in a ramp or a shaft. It is believed that economical ore exists above the 100-ft. level.

Sheridan can earn a half interest in the property by spending $500,000 on exploration and development work during a 5-year period, including $200,000 within two years and another $200,000 within the next two years.

He can earn an additional 25% by spending an extra $500,000 during the 5-year period. Sheridan will assume all expenses to bring the property into production, with Lithos retaining a 25% net carried interest.

The agreement is subject to regulatory approval.