Talking of Putting Their APG MOney to Good Use -- Exall is Off and Running:Exall, Southern Star enter Gold Eagle mine agreement
2002-10-10 07:15 PT - News Release
Mr. Stephen Roman of Exall reports
EXALL SIGNS AGREEMENT WITH SOUTHERN STAR RESOURCES INC. ON GO ...
A heads of agreement has been signed with Southern Star Resources regarding Exall's 100-per-cent-owned Gold Eagle mine property, which is located in the heart of the Red Lake gold camp. The Gold Eagle mine was a gold producer in the late 1930s and is bounded to the east by Goldcorp Inc.'s Cochenour mine and to the north by the former McKenzie Red Lake mine, now also controlled by Goldcorp.
To earn its 50-per-cent interest, Southern Star must make cash payments totalling $160,000 and issue three million common shares over a three-year period. In addition, Southern Star has agreed to incur exploration expenditures totalling $2-million over a three-year period. Southern Star will initiate a full-sequence exploration program on the property immediately upon receipt of exchange approvals and execution of a definitive operating agreement.
Northfield Capital Corporation is backstopping the financing for the first year's work commitment of $350,000 and will receive a fee from Southern Star in the form of 350,000 common share purchase warrants exercisable at 12 cents for its services.
Upon full completion of the above commitments, Exall and Southern Star will jointly manage further development through a management committee. A definitive operating agreement will be signed on or before Nov. 15, 2002. The Gold Eagle mine property, which is 100 per cent owned by Exall, consists of 35 patented claims totalling 726.1 hectares (1,793.5 acres) in the heart of the Red Lake camp. The mine produced approximately 40,000 ounces from the Gold Eagle vein system using a shaft and winze on eight levels to a depth of 305 metres. The mine operated from 1937 to 1941. Since operations ceased, no significant exploration program has been undertaken on the property. With formerly large producing mines on two sides of the property and a recently announced new discovery near the northern boundary, the property is exceptionally well located. For example, the McKenzie Red Lake mine on Gold Eagle's northern boundary produced 651,156 ounces and the Cochenour Willans mine on the eastern boundary produced 1.24 million ounces at a grade of 18.5 grams Au per tonne. There are no royalties on the property. The agreement is subject to board of director and regulatory approvals for both companies.
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