Shoreham on verge of buying out Marudi Mountain gold project

Canadian mining company, Shoreham Resources Ltd, is on the verge of buying-out Infinito Gold Ltd’s mining properties here including the Marudi Mountain Project in Region Nine.

A press release yesterday said that the two companies have completed and executed a definitive share purchase and sale agreement. Under the terms of the Agreement, Shoreham will acquire 100% of the issued and outstanding common shares of Infinito’s subsidiaries in Guyana and Aruba, which hold the Marudi Mountain and Paint Mountain and the Potaro mineral concessions. The Agreement will replace and supersede existing option agreements between Shoreham and Infinito in respect of the concessions.

“Closing of the Acquisition is subject to certain closing conditions, including TSX Venture Exchange approval. Total consideration to be paid by Shoreham to Infinito for the Acquisition is US$500,000 in cash, of which US$100,000 was advanced as a deposit on August 17, 2010, and the remainder of which will be paid on the closing of the Acquisition, and 1,600,000 common shares of Shoreham, which will be issued on the closing of the Acquisition”, the release said.

Infinito will be granted a 2% Net Smelter Returns (NSR) royalty for all future mineral production from the Marudi Mountain Project to a maximum of US$3M and a 2% NSR royalty for all future mineral production from the Potaro Project, to a maximum of US$2M. “Upon closing of the Agreement, Infinito will transfer to Shoreham a 100% right, title and interest in and to the Infinito Subsidiaries, free and clear of all encumbrances (except permitted encumbrances) and the interests of others”, the release said.

Infinito’s local subsidiary, Romanex Guyana Exploration Limited is involved in large-scale alluvial gold mining at the Marudi Mountain property.

While Romanex holds the mining licence, Shoreham had previously exercised an option to acquire 75% of the shares of Romanex, which is held by Infinito.

Shoreham had signed an agreement with a French mining company Rexma Participacions (Rexma), for that company to work in the Marudi Mountain Gold Project. The company had committed to a major expansion of production capacity within the next two years.

The project had suffered some delays. According to the project summary of the Marudi Mountain project, the project will entail the excavation of mineralized gravel, the establishment of a mineral processing plant for the recovery of gold and the construction of supporting facilities, buildings and road.

No chemicals will be used and the project will serve as a demonstration of non-chemical recovery of gold from placer deposits.

It is expected that the mine will operate 10 hours each work day and will process 600 cubic metres of mineralized gravel each day. The equipment has been sized to operate for 350 days per year. Average production will be 200,000 cubic metres per year at the beginning of the operation and this will increase to 400,000 cubic metres annually in year two, and this production level will be maintained for the remainder of the operation, the Summary states.

As regards ore recovery, the alluvial deposit will be mined by open pit methods in the creeks’ flats. Gold will be recovered by gravity separation using mobile screen and concentrator units. This will allow rehabilitation of mined out areas to occur as work advances, the project summary states.

The company also plans to construct an all-weather gravel surfaced roadway, linking Marudi to Aishalton, about 45 kilometres long.

The company also envisions maintaining the 180 kilometres long road from Lethem to Aishalton in the dry season by periodic grading to facilitate transportation of operating supplies into the mine site. The company also planned to build a 600-metre airstrip at the site.

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