CoveI would like to see Victoria Gold Buy out Newmont part of the Cove project. It would clean up the project since Newmont was not interested in buying back in. Not really big enough for them. It looks like it would cost $1,500,000 plus a max of 5% NSR.
Newmont has a back-in right that it may exercise anytime prior to thedelivery of a positive feasibility study for a minimum of 500,000 ouncesof gold resources. Upon delivery of such a study Newmont must make adecision with respect to the back-in within 90 days or the back-in rightterminates. Should the back-in right be exercised, the property willrevert to a 51% Newmont/ 49% Victoria joint venture with Newmont asoperator. In order to acquire a 51% interest, Newmont is required tosolely fund all joint venture expenditures in an amount equal to 250% ofthe expenditures incurred on the Cove McCoy property from June 15, 2006to the effective date of the joint venture agreement. Should Newmontelect not to back-in, Victoria will pay a US$1.5 million cash payment toacquire Newmont’s remaining rights to the project and will grantNewmont a sliding scale net smelter return royalty (“NSR”) which will bea maximum of 5%, inclusive of any other royalties that apply to theproperty or portions of the property, for a gold price over US$500 perounce.