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Colombian Mines inks option to acquire Nevada gold project

Colombian Mines Corp. said Sept. 27 that it has signed a definitive agreement to fully acquire the Pamlico gold project in Nevada, with an option to purchase the property for either US$7 million or, if exercised and paid within four years, for US$4 million.

Pamlico is a historic high-grade producer with recent drill intercepts of 4.6 meters at 239.15 g/t of gold. The project has permits for pilot mining and processing of bulk samples via a modern "trackless" decline completed in 2013.

The property is subject to a 4% net smelter return royalty, of which the company can purchase 3 percentage points for US$1 million per percentage point, or US$3 million total at any time during the agreement.

During the option period, the company will pay US$250,000 per year as preproduction cash payments. The cumulative value of all payments will apply to the final purchase price.

Colombian Mines is planning to undertake an exploration and development program this fall once funding is in place.