Minera IRL forms JV with Collingwood to explore Veca gold property

Lima-based gold producer Minera IRL (Lima, AIM: MIRL) has signed a letter of intent with Collingwood Peru to form a JV to explore the Veca property some 30km southeast of Huamachuco district in La Libertad region, the former said in a statement.

Under the agreement, Minera IRL will pay Collingwood US$100,000 for 60% of the project and Collingwood will keep the remainder. The deal is expected to close this month.

Minera IRL also agreed to pay Collingwood US$10/oz for the gold it discovers and converts into proven and probable reserves, and US$0.15/oz for silver recovered if the operation enters production.

The company also has the option of increasing its stake to 70% by paying Collingwood US$2mn and can increase that to 80% under certain scenarios, Minera IRL said.

The company also agreed to spend at least US$200,000 in exploration expenses the first year and has the right to terminate the agreement at any time after the first year.

But if Minera IRL chooses to continue past the first year, it must pay another US$200,000 in exploration expenditures and issue an advance payment of US$400,000 to Collingwood.

Minera IRL also runs the 30,000oz/y Corihuarmi gold mine in Peru and has other precious metals projects.

Publication: Business News Americas - English News
Provider: Business News Americas
September 8, 2009