French company to start Rupununi mining operation

– promises major expansion within 2 years

A French gold mining company is looking to begin production at the Marudi Mountain area in the Rupununi by November 1 and has committed to major expansion of production capacity within the next two years.

The company, Rexma Participacions (Rexma), an alluvial mine operator based out of Leon, France, has signed an agreement with Shoreham Resources Limited, a Canadian exploration company to work in the Canadian company’s Marudi Mountain Gold Project. Shoreham, meanwhile, is exercising an option to acquire 75% of the shares of Romanex Guyana Exploration Limited, which is held by Infinito Gold Corporation (formerly Vanessa Ventures Incorporated). This newspaper was unable to establish yesterday whether the French company will be operating in Romanex’s lease area.

Commissioner of the Guyana Geology and Mines Commission, William Woolford, had told this newspaper in December that Romanex was one of two companies granted large-scale mining licences last year. Romanex was given approval to commence large-scale gold mining operations at the Marudi Mountain area in Region Nine (Upper Takutu/Upper Essequibo) where it holds a lease. Woolford had said that the company was looking to begin operations this year.

Woolford could not be reached for comment yesterday as he was said to be in meetings and Administrator of Romanex, Jennifer Falconer, declined to comment when contacted.

In a release announcing the development, Shoreham said it has the right to earn a 75% working interest in the Marudi Mountain Property by exercising an option to acquire 75% of the shares of Romanex. The release stated that Shoreham must invest US$4 million in the project by March 2011 in order to acquire its 75% interest. “Shoreham’s expenditures to date significantly exceed the requirements of the agreement and the Company expects to meet its vesting requirements ahead of schedule, the statement added.

Shoreham is a Canadian exploration company dedicated to the exploration of advanced precious metals and polymetallic deposits in South America and Canada. According to its website, the company holds significant exploration land positions in the Marudi Mountain and Potaro River (Omai/Mahdia area) of Guyana. These project areas include the advanced Marudi Mountain/Mazoa gold targets and the Maple Creek Diamond/Gold Mine. The company is actively exploring for gold along the Marudi Mountain/Paint Mountain Trend and in the lateritised greenstone areas of the Potaro Project area. The objectives are expansion of the Marudi targets to a nominal objective exceeding one million ounces of gold, and development of shallow bulk mineable gold targets in the Potaro area, according to a statement on its Guyana operations.

The release yesterday stated that on August 21 last year, Shoreham and REXMA had signed a Definitive Agreement entitled “Project Operating Plans and Principles – Marudi Mountain Alluvial Mining Agreement.” The original agreement, Shoreham said, envisaged commencing sustained production at a rate of 500 cubic meters per day commencing July 1 this year with an ultimate target rate of 2,000 cubic meters per day.

Since that time, REXMA has undertaken field investigations to firm up mining, resource and processing parameters and have signed a revised Agreement with Shoreham whereby REXMA has committed to providing Shoreham with a definitive mining plan by March 31, 2009 and to be in production by November 1, 2009 at a minimum sustained production rate of 125,000 cubic meters per year. The company has also committed to increasing their plant capacity to 200,000 cubic meters per year by October 1, 2010 and further increasing operations to at least 300,000 cubic meters per year prior to October 1, 2011, the release said.

REXMA will be responsible for all of its costs and will be required to pay Shoreham an agreed upon monthly sum for Shoreham’s Guyanese overhead, office and support costs. The French company will also be responsible for paying all royalties to the Guyana government and underlying royalty holders and will pay a gross production royalty of 10% to Romanex, 100% of which monies Shoreham has the right to use to support its own exploration on the Marudi property. In addition, all expenditures incurred by REXMA qualify as earn-in expenditure by Shoreham to acquire 75% of Romanex. Pursuant to notice provision, REXMA’s operations must be relocated from areas which Shoreham needs to undertake its own exploration and mining activities, the release stated.

Initial operations will be integrated as a pre-stripping component of Shoreham’s development program for the property. “The benefits to Shoreham include improvements to access and infrastructure, expansion of facilities, accelerated development of saprolite and bedrock targets, acceleration of property interest vesting through qualified expenditures, generation of cash flow to fund Shoreham’s own exploration and development programmes and reduced overheads through cost sharing,” the release declared. It quoted David Bending, President and Chief Executive Officer of Shoreham as stating that “the Company is very pleased to confirm that REXMA is fully committed to begin alluvial gold mining and gold production at our Marudi Mountain Gold Project by November 1, 2009 and are looking forward to receiving REXMA Mining Plan by March 31, 2009.”

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