Metalcorp options 50% of Hemlo East claims to Cava
2012-12-04 16:37 ET - News Release
Also News Release (C-CVA) Cava Resources Inc
Mr. Chris Dougherty of Metalcorp reports
METALCORP SIGNS OPTION AGREEMENT WITH CAVA RESOURCES FOR A 50% INTEREST IN METALCORP'S GOUDA DEPOSIT AT ITS HEMLO EAST PROPERTY
Metalcorp Ltd. has signed an agreement with Cava Resources Inc. granting Cava an option to earn a 50-per-cent interest in 40 mineral exploration claims east of the White River in its Hemlo East property near Marathon, Ont. The agreement is subject to TSX Venture Exchange approval.
To earn a 50-per-cent interest, Cava must incur $1.5-million of exploration expenditures on the property and issue 3.25 million shares to MetalCorp. Of the expenditures, $250,000 must be incurred by Dec. 31, 2012, a further $500,000 by Dec. 31, 2013, and the balance by Dec. 31, 2014. Of the shares, 500,000 must be issued within seven days after commencement of a drilling program, 750,000 by Dec. 31, 2013, and two million by Dec. 31, 2014. During the term of the option agreement, MetalCorp will act as operator and earn a 10-per-cent operator's fee. On completion of the option, the two companies will form a joint venture and MetalCorp will retain a 2-per-cent net-smelter-returns royalty, half of which may be purchased by Cava for $2-million.
MetalCorp's Hemlo East property is located to the east of and adjacent to the 23-million-ounce Hemlo gold mine property which is now 100 per cent owned by Barrick Gold. The claim group being optioned to Cava -- initially called the Python project containing the historic Gouda and Thor deposits -- is separated from the western part of MetalCorp's Hemlo East property by the White River exclusion zone, an area where no claims may be staked. The Hemlo East property has excellent infrastructure with access provided by the Trans-Canada Highway 17. All-weather roads lead from the Trans-Canada Highway, while a railway traverses the northern part of the property.
"We are pleased to be working with Cava to further explore the Gouda and Thor deposits at our Hemlo East project, and look forward to further success in the coming year," says Chris Dougherty, president of MetalCorp.