(MENAFN - ProactiveInvestors - Australia) Pacific Niugini (ASX: PNR) is acquiring interests in an advanced Mexican gold project where several phases of bulk testing have already being completed from Minera Global del Pitic (MGP).
The company will undertake commercial and administrative due diligence, followed by a bulk sampling campaign to confirm gold tenor within the Caldera Gold Project in Sonora County.
Testing, which will be carried out Pacific Niugini's cost, will be undertaken using the same bulk sampling plant configuration currently employed in Papua New Guinea. This is expected to be completed in early 2013.
During or following completion of testing, Pacific Niugini can elect whether to progress the project to development and production, or to exit with no further obligations, penalties or costs.
If Pacific Niugini elects to progress the project to production following the testing phase, the project will be developed at Pacific Niugini's cost. Pacific Niugini will take ownership of 50% of the shares in MGP
In addition, Pacific Niugini will:
- Receive 85% of profits until all capital expenditure that it has made on the project has been repaid;
- Be entitled to a 75% share of profits for the first 50,000 ounces produced after repayment of capital expenditure;
- 60% of profits for the second 50,000 ounces produced; and
- 50% of profits for the remaining life of the operation.
Caldera covers 6,900 hectares in 18 mining concessions and is located in a gold and silver producing province.
The project is located about 75km north of Hermosillo, which is a major mining service centre for Sonora County.
Although no resources have been declared, extensive trench sampling to a depth of 12 metres has been completed with gold grades between 0.1 grams per tonne gold and 0.8g/t gold noted in professionally prepared reports provided by the vendors.
Previous sampling at the deposit has included rudimentary gold panning tests, and larger scale bulk sampling using standard gravity recovery plants. Recent sampling by Resource Development of Colorado reported an average feed grade of 0.57 g/t for a 950kg bulk sample.
The majority of work completed to date has been concentrated in an area of approximately 100 Ha, however panning tests reported by MGP over approximately half of the granted concession area indicate the occurrence of gold over much larger areas.