QUEBEC - Agnico-Eagle Mines and North American Palladium (NAP), both of Toronto, have signed a letter of intent whereby NAP will acquire Agnico's Vezza gold property only 80 km from NAP's Sleeping Giant mine and mill north of Amos. The cash-and-share deal is worth $10 million. NAP will pay $3.5 million in cash and $6.5 million in shares to Agnico.
The Vezza gold deposit underwent extensive exploration of 85,000 metres of drilling, and substantial underground development under Agnico's ownership. The project includes a three-compartment shaft with four underground levels down to a depth of 741 metres, a hoist, and surface and pollution control infrastructure. An internal feasibility study was prepared by Agnico in 1997, but the project was never put into production due to the absence of nearby milling facilities and relatively low gold prices at the time.
A recent 43-101 estimate of the resources includes 1.5 million tonnes at 5.9 g/t Au in the measured and indicated categories. A further 754,000 tonnes at 5.0 g/t make up the inferred resource. A total of 410,000 oz of gold are contained in those resources.
"The acquisition of Vezza supports our strategy to increase gold production by leveraging our underutilized Sleeping Giant mill," said William J. Biggar, NAP's president and CEO. "With Vezza, we now have a sufficient number of projects in our pipeline that, if developed, could significantly increase production in our gold division."
Visit www.NAPalladium.com where updated information about Vezza will be posted as it becomes available.
Earlier this month, NAP entered into a $87-million bought deal to fund development of the Offset zone at its Lac des Iles palladium mine in northern Ontario.