Richmont Mines Announces Option to Acquire a 50% Operating Interest in the Golden Wonder Mine a Past Producing Colorado Gold Min
13 November 2007 - 3:28AM
Marketwired
MONTREAL, CANADA (AMEX: RIC) today announced that it entered
into an agreement with LKA International, Inc. (OTCBB: LKAI) on
November 5, 2007, which grants Richmont an option to earn a 50%
joint-venture interest in LKA's Golden Wonder Mine located near
Lake City, Colorado. Under the agreement, Richmont will make an
option payment of US$150,000 to LKA for the opportunity to evaluate
the Golden Wonder Mine and surrounding property over a 60-day
period from the date of the agreement and an additional payment of
US$150,000 at the end of the period if it elects to exercise its
option. Richmont is entitled to 50% of the net proceeds from the
sale of gold during all phases of the project.
The Golden Wonder Mine is a high-grade, epithermal deposit, with
veins averaging two to three feet in width, located in the
historically precious metal rich Colorado Mineral Belt near the
mining districts of Ouray, Telluride, Silverton and Creede.
Previously in commercial production from 1998 through June 2006,
the mine produced approximately 8,400 tons of ore with an average
grade of 16 ounces/ton (oz/t) and yielded 133,701 ounces of gold.
Mining operations were conducted between the third and sixth levels
from two horizontal access drifts along the Gold Hill in the San
Juan mountains. Exploration efforts in 1998 also included a 100
foot shaft down to the seventh level, with an horizontal extension
on seventh level of about 50 feet. The ore trends generally in a
north-east direction with a north dipping of 75 to 80 degrees and
the mineralization is embedded in an altered felsic volcanic rock
package. The main lower access is located on the sixth level and
consists of a nine-by-nine foot trackless haulage crosscut over
1000 feet in length.
During the evaluation period, Richmont plans to rehabilitate the
existing shaft, toward the seventh level, and obtain chip samples
to evaluate the ore zone width, continuity and overall gold
content. Richmont expects to invest approximately US$250,000 in
this particular phase of the project, which will be applied towards
future work commitments.
Mr. Martin Rivard, President and Chief Executive Officer of
Richmont Mines, commented, "The historic grade of the ore produced
from the Golden Wonder Mine has been excellent, and we are
encouraged by the significant upside potential this evaluation
opportunity presents for LKA and Richmont Mines. It has been our
strategic objective this year to actively uncover projects that
capitalize on our expertise to explore, develop and mine
narrow-vein, underground ore bodies."
If the option is exercised at the end of the evaluation phase,
Richmont Mines will have to invest a total of US$18million over a
63-month period in three commitments of US$6 million each to earn
its 50% operating interest. Terms of the joint venture call for
exploration and development expenditures of US$6 million within 15
months of the joint-venture agreement date with the objective of
advancing the property towards commercial production. Upon the
completion of the second investment of US$6 million in expenditures
within an additional two years, Richmont will gain a 50% operating
interest in the property. The final US$6 million commitment on
exploration and development expenditures will be required within 24
months after Richmont has gained its interest in the property.
Right after the signature of the joint venture agreement, net
revenue from future gold sales will be shared on a 50%-50% basis
between LKA and Richmont Mines.
Martin Rivard
President and Chief Executive Officer.
About LKA International, Inc.
LKA is a Gig Harbor, WA based natural resource holding and
development company. The Company's primary assets are the Golden
Wonder mine and the Ute-Ule silver mine and mill. Both of these
properties are located in Hinsdale County, CO.
About Richmont Mines Inc.
Richmont Mines produces gold from its operations in Canada and
has extensive experience in gold exploration, development and
mining. Since it began production in 1991, the Company has produced
approximately one million ounces of gold from its holdings in
Quebec, Ontario and Newfoundland. Richmont Mines' strategy is to
cost effectively develop its mining assets, exploit mineralized
reserves on properties owned and acquired, or develop partnerships
to expand its reserve base.
More information on Richmont Mines can be found on its website
at: www.richmont-mines.com.
National Instrument 43-101 (NI 43-101)
The technical information contained in this release is based on
historical data which was not prepared in accordance with National
Instrument 43-101. Mr. Jules Riopel M.Sc. PGeo., MBA, Director
Geology and Exploration, an employee of Richmont Mines Inc has
reviewed the content of this news release.
Disclosure Regarding Forward-Looking Statements
This news release contains forward-looking statements that
include risks and uncertainties. When used in this news release,
the words "estimate", "project", "anticipate", "expect", "intend",
"believe", "hope", "may" and similar expressions, as well as
"will", "shall" and other indications of future tense, are intended
to identify forward-looking statements. The forward-looking
statements are based on current expectations and apply only as of
the date on which they were made.
The factors that could cause actual results to differ materially
from those indicated in such forward-looking statements include
changes in the prevailing price of gold, the Canadian-United States
exchange rate, grade of ore mined and unforeseen difficulties in
mining operations that could affect revenues and production costs.
Other factors such as uncertainties regarding government
regulations could also affect the results. Other risks may be
detailed Richmont Mines' Annual Information Form, Annual Report and
periodic reports. Richmont Mines undertakes no obligation to update
or revise its forward-looking statements, whether as a result of
new information, future events or otherwise.
www.richmont-mines.com
Contacts: Kei Advisors LLP Tammy Poblete, Investor Relations
716-843-3853 tpoblete@keiadvisors.com