June 29/99-FLA.ASE-Fairmile and Newmont Lease Exchange at Buffalo Valley
FAIRMILE GOLD CORPORATION
ASE: FLA
Fairmile and Newmont to Exchange Leases at Buffalo Valley
June 29, 1999
Vancouver, BC: Fairmile Gold Corp. (Fairmile, ASE:FLA) and Newmont Mining Corp.'s (NYSE:NEM) wholly-owned subsidiary, Santa Fe Pacific Gold Corp. (SFPG), have signed a letter of intent to exchange mining leases at Buffalo Valley, Nevada. Final agreements are subject to satisfactory title review and approval by both companies. Independently, Fairmile's underlying Buffalo Valley purchase agreement with Repadre Capital Corp. (Repadre, T:RPD) will be restructured.
One agreement will allow SFPG to lease section 14 (T32N, R42E) from Fairmile. Section 14 is federal land located immediately south of, and on strike with, SFPG's North Peak Open Pit. No resource has been identified on this prospective ground to date.
The second agreement will allow Fairmile to lease the fee land in the western portion of section 33 (T32N, R42E) from SFPG. Horizon Gold Shares originally leased this land, with Fairmile assuming the 10-year lease in 1994. The lease was to be up for renewal in October 1999. The western portion of Target L lies on this ground, where Fairmile has encountered long intervals of low-grade gold in widely spaced, exploration drill holes. Fairmile's A/B/O resource lies to the east, and Fairmile's 1998 drilling indicates that mineralization may extend onto the lease ground.
Both leases are for an initial term of 20 years unless terminated earlier, and thereafter as long as minerals are mined, produced or sold from the property. Fairmile will receive at closing certain cash payments totaling US$27,116 and will be relieved of making certain payments, saving Fairmile US$10,719 annually. Repadre will sever section 14 from the underlying purchase agreement and forgive the remaining payments due for section 14, saving Fairmile US$45,800 in purchase cost. Fairmile may elect to defer some of the purchase payments owed to Repadre if the price of gold is below US$325 on February 1, 2000. Deferred payments will carry a 10% per annum interest charge.
Both leases will have an initial royalty of 5% NSR. The royalty on section 14 will be 3% to Repadre with no cap and 2% to Fairmile with a cap of US$500,000. The royalty on section 33 will be 5% to SFPG to a cap of US$500,000, after which time the royalty will be 3% to SFPG and 3% to Repadre. This is a reduction from the 8% NSR originally burdening this prospective area.
Fairmile also controls the Highland and Eastgate Projects, both in Nevada. Eastgate is a joint venture with Echo Bay Mines, Ltd. (operator). Fairmile is seeking joint-venture partners for Highland and for Buffalo Valley (exclusive of section 14). To obtain more information about Fairmile, visit our Web Site at fairmile.com or contact Investor Relations at (604) 257-4254.
“Joseph Anthony Kizis, Jr.”
Joseph Anthony Kizis, Jr., President and CEO
This News Release contains forward-looking statements that are subject to various risks and uncertainties. Such statements contained herein represent management's best judgement as of this date based on information currently available. Actual results may differ materially from those currently anticipated in these statements.
The Alberta Stock Exchange has neither approved nor disapproved the information contained herein.
Telephone: (604) 257-4254
Fax: (604) 608-2949 |
