BCGold Corp. ("BCGold" or the "Company") is pleased to announce it has signed a Letter of Intent ("LOI") with Solid Holdings Ltd. ("Solid") whereby Solid will finance and construct a minimum 30 tonne per day turn-key mine, mill and gold refining operation (the "Engineer Mine") at BCGold Corp.'s historic Engineer Mine property, situated 32 km west of Atlin, British Columbia.
Within a 3 year time-frame Solid is required to produce a minimum of 10,000 ounces of gold, with 1,500 ounces to BCGold's credit, on a gross-sale basis from the Engineer Vein on 6 and 7 Levels of the underground mine workings. Upon completion of these provisions, Solid may elect to acquire a 50% interest in the Engineer Mine by way of a joint venture agreement ("JV") with BCGold Corp. (see Proposed JV Terms below).
Further details of the 3 year earn-in period are as follows:
- BCGold and Solid have 45 days to complete due diligence and finalize a definitive agreement
- Solid will provide engineering, procurement, design, civil works and other construction expenses, as well as all administrative and infrastructure expenses associated with the Engineer Mine
- Solid will cover all operating and initial/ongoing capital costs associated with the Engineer Mine
- Solid will retain 85% of gross gold sale proceeds (remaining 15% to go to BCGold Corp.) of the initial 10,000 ounces of gold production in the form of dore bars or marketable gold-rich concentrate
"BCGold is very pleased to enter into this agreement with Solid," states Brian P. Fowler, P.Geo., President and CEO of BCGold Corp. "This agreement provides BCGold Corp. with cash flow during the 3 year earn-in period and a 50% interest in a fully functional mine and mill complex at no cost to the Company. Management of BCGold and Solid believe that previous exploration and bulk sampling results at Engineer Mine substantiates the basis for a sustainable small-scale gold mining operation."
Proposed JV Terms
Should the terms of the LOI be met, and Solid choose to enter into a JV with BCGold Corp., it will entail a 50/50 split ownership of the Engineer Mine and surface and mineral rights of the crown grant property, with certain specified exceptions. The JV will be responsible for management and operation of the Engineer Mine, including all associated operating and ongoing capital costs, as well as near-mine exploration and resource definition. Net proceeds from gold sales will be distributed to the JV partnership on a 50/50 basis.
BCGold Corp. will retain 100% mineral rights to the Hub A, Hub B, Shear A, and Shear B bulk tonnage exploration targets. BCGold Corp. will also retain the Guardsmen option, where the Company may earn up to 100% interest in the surrounding 2,104 ha Gold Hill property (see news release dated October 4, 2010).
Should Solid elect not to proceed with the JV, BCGold shall have right of first refusal with respect to any infrastructure proposed to be sold by Solid.