Spokane-based Mines Management Inc., which is involved in acquisition, exploration, and development of mineral properties containing precious and base metals, says it has signed a letter of intent with Estrella Gold Corp. for an option to acquire up to 75 percent of a central Peru gold-silver project.
Under the agreement, the option allows Mines Management through its subsidiary, Minera Montanore Peru SAC, to earn 75 percent ownership by spending $5 million over four years on drilling exploration at the La Estrella project and fulfilling other terms, a Mines Management news release says.
La Estrella is an advanced-exploration stage project on about 6,200 acres of land, located 142 miles southeast of Lima, Peru. The mine is in a region with a history of silver mining dating back to the 1500s, and the area has established infrastructure, roads, and electricity.
The property is fully permitted for additional drilling, the news release says.
"The project is in a favorable district and possesses a number of very positive attributes, including previous exploration success and a permitted drilling program which may afford us the ability to move forward expeditiously," Mines Management President and CEO Glenn Dobbs says in the news release.
The agreement terms call for Estrella Gold Corp. to retain a 25 percent interest in the project if Mines Management elects to exercise the option by completing all payments and expenditures.
Mines Management, which is headquartered at 905 W. Riverside in downtown Spokane, for now is focused mostly on the advancement of the Montanore silver-copper project, located in northwestern Montana.
The company is seeking federal approval this year of an exploratory mining permit that could lead to a large silver and copper mine at the Montanore project, about 18 miles southwest of Libby, Mont., beneath the Cabinet Mountains Wilderness, and just east of the Rock Creek Mine proposed by Revett Minerals Inc., of Spokane Valley.
Mines Management estimates that a three-year construction project to open up that mine would create about 500 jobs, cost an estimated $552 million, and retain about 350 long-term employees.
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