Equitorial Exploration Corp.’s (EXX:CA) 45-per-cent-owned subsidiary, First Nevada Mining Corp. (FNMC), has signed an operating agreement with Keystone Mine LLC of Surprise, Ariz., and Mining Global Inc. of Wickenburg, Ariz. The agreement outlines the terms and conditions for the mining and processing of material from Keystone’s 100-per-cent-owned Keystone mine in Wickenburg, Ariz.
The Keystone mine property is located 12 miles east of the town of Wickenburg in Yavapai county, Arizona. The property consists of 172.613 acres of private land in the historical Black Rock mining district.
The operating agreement outlines terms under which FNMC can participate in profit sharing through the processing of up to 80,000 tonnes of stockpiled material at the Keystone mine. Under the terms of the operating agreement, FNMC will pay Keystone and Mining Global 50 per cent of the net income generated on the property from the sale of materials produced, extracted or concentrated from processing of 30,000 tonnes of stockpiled material on the property. Prior to the distribution of any net income, FNMC shall recover all direct costs related to the mobilization, set-up, bulk sampling, preproduction or production costs on the property.
FNMC may commence commercial mining operations subject to a successful demonstration of economic viability through the completion of a bulk-sampling program (limited to 400 tonnes), a one-time payment to Keystone of $25,000, maintaining minimum monthly payments of $5,000 to Keystone, and by obtaining all insurance, certificates, licences and authorizations necessary to carry out mining operations on the property, as stated under the laws of Arizona. For any amounts of material processed exceeding the first 30,000 tonnes, but not exceeding 80,000 tonnes, FNMC will earn 45 per cent of the net income generated.
The material will be shipped and processed at a fully permitted plant located approximately 32 miles by road from the Keystone property.
Duane Nelson, chief executive officer of FNMC, reported: “I am very pleased to be moving forward with this project. It offers potentially near-term, low-cost production and is an ideal candidate for the demonstration of our environmentally friendly mining technologies and unique business model.”
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