To: E. Charters who wrote (59661 ) 5/26/2008 2:20:19 PM From: AuBug Read Replies (3) | Respond to Here's the original April 4, 2006 PR stating the Newmont back-in agreement for Cove:Under the lease, Victoria will also be subject to escalating yearly work commitments that total US$8.5 million over 7 years, of which a minimum of US$1,000,000 must be expended within 24 months of signing the final agreement. Newmont will have a one-time back-in right upon Victoria’s completion and delivery of a positive feasibility study for a minimum of 500,000 ounces of gold resources. Should it be exercised, the property will revert to a 51% Newmont - 49% Victoria joint venture with Newmont as operator. The back-in requires that Newmont must spend 2.5 times the exploration expenditures of Victoria to earn its 51% interest in the property. Should Newmont elect not to back-in, Victoria will pay a US$1,500,000 cash payment to acquire Newmont’s remaining rights to the project and will grant Newmont a sliding scale net smelter return royalty which will be 5% for a gold price over US$500 per ounce. Victoria has also agreed to preferential processing rights whereby Newmont, with processing facilities as close as Phoenix some nine miles to the north, may provide an alternative to reconstruction of a processing facility on the Cove-McCoy property. "VIT could spend $8 million to find 3 million ounces only to lose it for $1.5 million. " How does VIT loose it for $1.5 million? If it doesn't play out they don't pay the $1.5 million and they walk.
