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Chalice buys back Canadian royalty

10th March 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Dual-listed gold miner Chalice Gold Mines has exercised its right to buy back two-thirds, or 2%, of an existing 3% net smelter royalty at the Cameron gold deposit, in Canada, for C$2-million.

Chalice in February last year acquired the Cameron gold project through a merger with Canada’s Coventry Resources. At the time of the acquisition, Chalice retained the right to buy back part of the net smelter royalty at any time prior to April 20 this year.

The miner told shareholders on Tuesday that with a preliminary economic assessment (PEA) for the Cameron project expected in April, the acquisition of the net smelter royalty was expected to increase the project’s net present value.

Following the acquisition of the royalty, the Cameron deposit would carry a 1% net smelter royalty in addition to a smaller royalty of C$0.30/t of ore mined and milled.

The Cameron gold deposit has measured and indicated resources of 567 000 oz at 2.45 g/t and an inferred resource of 829 000 oz at 2.11 g/t. A PEA determined a mine could produce 61 000 oz/y at an average cash cost of $852/oz over ten years. It has an estimated initial development and capital expenditure of $110-million.

Edited by Creamer Media Reporter

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