Virginia Gold signs $5.25-million Gayot agreement
Virginia Gold Mines Inc VIAShares issued 25,950,3702000-01-17 close $0.88Monday Jan 17 2000Mr. Andre Gaumond reports Virginia Gold Mines has signed an agreement with Billiton Metals Canada Inc., a wholly owned subsidiary of Billiton Plc, on the Gayot project which covers 322.5 square kilometres. The project is in the Caniapiscau area of Quebec, Canada. Under the terms of the agreement, Billiton is committed to realize a private placement of $750,000 or $1 per share which will give Billiton, for a 6-month period, an exclusive right to exercise an option to earn a 50-per-cent interest in the Gayot project in return for $4.5-million in exploration expenditures over a 3.5-year period according to the following schedule:
Cumulative
Expenditures
On or before May 1, 2001: $1,000,000
On or before May 1, 2002: 2,200,000
On or before May 1, 2003: 3,500,000
On or before Nov. 1, 2003: 4,500,000
Once Billiton has incurred a total of $4.5-million within the 3.5-year period, Billiton will have the option to vest in a 50-per-cent interest into the Gayot property which will provide Billiton with the right to complete a second private placement into Virginia for an amount equal to up to 5 per cent of the shares outstanding of Virginia at that date, at the market price, less maximum discount permitted by the securities authorities with a minimum price of $1.60 per share. Virginia will be the operator of the project over the next seven years, then after Billiton will have the right to become the operator of the project. After the earn-in of the 50-per-cent interest, Billiton will also have a marketing right on metal products from the Gayot project. This marketing agreement is to be based on arm's-length transactions and commercial competitiveness. Virginia has discovered a significant Ni-Pt-Pd mineralization on the Gayot project. Surface sampling of high-tenor showings returned values between 1.4 to 9.5 per cent Ni and up to 17.2 g/t Pd-Pt. Channel sampling returned values up to 2.5 per cent Ni, 0.5 per cent Cu, and 2.9 g/t Pd-Pt over 3.85 metres. Virginia is pleased with this new association with Billiton, a diversified mining company with mining activities on four continents. Winter work program will consist of geophysical ground survey followed by a drilling campaign. This agreement has been approved by the regulatory authorities. Furthermore, the issuing of shares related to this agreement will have to be in accordance with the Toronto Stock Exchange's issuance regulations and, if necessary, will have to obtain further approvals from the Toronto Stock Exchange. Virginia is amongst the most active mining exploration companies in Quebec, Canada, with $11-million in cash, approximately 26 million shares outstanding and is debt free. The company concentrates its activities in the vast unexplored regions of Northern Quebec. Its numerous properties, spread out all over the province of Quebec, cover unexplored territories. |
