As previously announced (see news release NR-08-18), OceanaGold may earn up to a 75 percent interest in Bravada’s low-sulfidation Highland gold/silver project in Nevada’s Walker Lane Gold trend.
OceanaGold may earn a 51% interest by making certain cash or share payments and incurring aggregate exploration expenditures of US$4 million over five years. OceanaGold may increase its interest to 75 percent within four years of earning its 51% interest by incurring an additional US$6 million in exploration expenditures.
Payments include advanced minimum royalty (AMR) payments to underlying property vendors, claim fees, an initial cash payment of US$50,000 to Bravada and an additional US$200,000 payment to Bravada upon OceanaGold earning a 51% interest in the property. Payment to Bravada at 51% earn-in can be in cash or shares at OceanaGold’s option.
A technical committee composed of OceanaGold and Bravada personnel will recommend work programs with OceanaGold having the sole decision on program work and expenditures. The Highland property is subject to a 3% NSR royalty in favour of the underlying vendors of the property subject to a reduction of the royalty to 2% upon payment of US$1 million. All AMR payments will be deducted from production royalties. Approximately US$500,000 in AMR payments have been made to date.
President Joe Kizis commented, “Highland is an excellent example of Bravada’s business model, which is to identify and advance early-stage, potentially high-margin gold/silver deposits in Nevada to a point that joint-venture partners then further advance the property through a combination of providing significant project funding and adding technical expertise. Shareholder dilution is minimized, and property dilution only occurs when a partner’s expenditures have increased the value of the property.
“We believe that there is great potential at Highland to discover high-grade gold/silver deposits, and we are pleased to have OceanaGold, a company with an excellent record of discovery of and production from similar deposits worldwide, advance our project. Low-sulfidation deposits worldwide are among the most attractive, highest-margin gold/silver deposits and many of the deposits are exploited by small-footprint, underground mining and relatively benign milling operations.
“Another important characteristic of low-sulfidation deposits is that they usually occur as clusters of similar-grade deposits, many of which may be blind at surface. Discovery rates tend to be high in such districts long after mining has begun. Highland’s location in an established mining region in Nevada reduces risks associated with land tenure, logistics, and capital and operation costs when compared to many regions of the world.”
Source: Company Press Release
