VANCOUVER – Silver Rock Resources Inc. wants to return to scene of California’s gold rush by partnering with Olympus Gold Corp. to exploit an abandoned Sierra mining property.
The Vancouver-based Silver Rock, which hasn’t listed its shares publicly, has signed a letter of intent to acquire up to a 60 per cent interest in several gold claims that operated between 1879 and 1959.
The Olympus-controlled Kate Hardy-Omega mine properties are located near the northern end of the historic MotherLode district.
The company plans to begin exploration activities in early 2012 as weather permits.
Under the terms of the option agreement, Silver Rock has exclusive right to acquire a 50 per cent interest in the properties for $ 1 million, in cash and exploration charges that are payable in stages until May 2013.
It can add another 10 per cent by paying $ 700,000 and issuing 800,000 shares.
With gold prices hitting record highs, Silver Rock believes it can unearth value at a site that was abandoned when metal prices were just $ 30 per ounce. Gold is trading at about US$ 1,691 per ounce after peaking in August at US$ 1,911.46.
Production is estimated at 25,000 to 30,000 ounces of gold.
But Silver Creek anticipates that further exploration drilling and expansion of existing historic resources will maximize gold production.
Local news from metronews.ca/vancouver
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