Gitennes Exploration to acquire Newcrest Mining's Peruvian assets
Gitennes Exploration Inc GIT
Shares issued 26,255,831 Jun 25 close $0.23
Mon 28 Jun 99 News Release
Mr. Jerry Blackwell reports
Gitennes Exploration has signed a letter of intent with Newcrest Mining
Limited, an Australian-listed gold company, to acquire Newcrest's assets in
Peru and Ecuador. The contemplated transaction will see Gitennes acquire
the shares and assets of four Newcrest affiliates, in cosideration of:
the issuance of one million common shares of Gitennes, plus
one million common share purchase warrants which may be exercised within 18
months of closing, at an exercise price of 45 Canadian cents, and
$90,000 (U.S.) in cash.
The transaction is subject to formal approval by the boards of directors of
each of Newcrest Mining Limited and Gitennes, plus all required approvals,
and completion of Gitennes Exploration's final due diligence review.
Highlights of the proposed acquisition include:
a 40-per-cent interest in the Rio Blanco project, a recently discovered
porphyry copper deposit in Northern Peru. Cyprus Antacori Corporation is a
60-per-cent joint venture partner. Newcrest geologists discovered Rio
Blanco in 1994, and Cyprus drilled the property in 1997 and 1998. To date
18 drill holes (spaced 200 to 700 metres apart) outline a large deposit
that is 1,300 metres by 1,800 metres in size at surface, down to depths of
400 metres below surface. Two important features of the Rio Blanco deposit
are the blanket of secondary enriched copper mineralization and the
high-grade protore. Newcrest has previously released assay results for the
following two higher grade drill holes. Subsequent drilling has returned
intersections of the enriched mineralization and protore which are also of
economic interest.
Hole Copper Mineral
Number Depth Interval Grade Zone
(metres) (metres) (%)
RB01 150-200 130 1.16 Enriched
(verti-
cal) 280-398 118 0.44 Protore
RB07 159-243 84 1.66 Enriched
(verti-
cal) 287-306 39 1.07 Transition
308-375 77 0.67 Protore
Drilling at Rio Blanco is at an early stage of exploration and the overall
size and grade of the deposit is yet to be determined.
Under the terms of the Rio Blanco agreement, Cyprus (as project manager)
will spend the initial $15-million (U.S.) ($3-million (U.S.) spent to date)
on exploration and development, plus deliver a prefeasibility study. Upon
Cyprus fulfilling this requirement, Gitennes will be required to finance
its 40-per-cent interest or face pro rata dilution.
Gitennes will acquire:
Newcrest's 40-per-cent interest in Rio Blanco Exploration LLC. Gitennes
will also acquire Newcrest's initial interest in Minera Newcrest Ecuador
S.A., a company with unexplored landholdings along strike from Rio Blanco,
in Ecuador.
a 100-per-cent interest in Compania Minera Newcreat Peru S.A. Newcrest Peru
is Newcrest's principal exploration vehicle in Peru, and has been active in
the country since 1994. Gitennes will acquire Newcreat Peru's extensive
proprietary database, fixed assets and mineral properties. The database
includes an exhaustive amount of mineralization in Peru, the results of
extensive reconnaissance programs throughout the country, as well as
property evaluations and recommendations. This will significantly enhance
and complement Gitennes Exploration's own database and will strengthen its
competitive advantage. Newcrest Peru owns several grassroots gold
exploration properties outright, and has an option to earn a minimum
51-per-cent interest in the Pico Machay gold project owned by Queenstake
Resources Ltd. Newcrest has spent $8.5-million (U.S.) on exploration in
Peru since 1994.
a 50-per-cent interest in Compania Minera Mincrest Peru S.A. The assets of
Mincrest are held jointly with Minorco Peru (50 per cent). The
Minorco/Newcrest joint venture, through Mincrest, has been exploring the
east slope region of the Central Andes for the past two years, and has
identified several grassroots targets.
Upon closing, Gitennes intends to review the structure of its Peruvian
affiliates and the status of its various projects. Gitennes, through wholly
owned Compania Minera Kori Playa S.A. and Compania Minera Kori Rumi S.A.,
is currently exploring the Azul property, the Lesbos property and is
continuing a countrywide search for quality precious and base metal
exploration properties. The Newcrest transaction is seen to significantly
broaden the company's asset base on terms commensurate with global market
conditions, without entailing long-term fiscal liabilities and obligations.
In addition to the pro-active exploration being done in Peru, Gitennes is
exploring for gold in Canada through its option agreement with Phelps Dodge
Corporation of Canada, at Nowyak Lake.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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