Euro-Nevada enters RI

Euro-Nevada enters RI

TORONTO (Reuter): Euro-Nevada Mining Corp. Inc. said it acquired an interest in the Mt. Muro project in Indonesia for US$18.5 million.

It said the interest, held by a major resource company, is in the form of a deferred purchase payment based on a sliding scale percentage of net smelter returns of production.

Euro-Nevada said the operator of the 480-square km project located in Kalimantan is 90 percent owned and controlled by a subsidiary of Aurora Gold Ltd. of Australia.

Aurora's latest quarterly report to June 30, 1995 showed production for the first six months was 55,000 ounces of gold and 1.56 million ounces of silver, Euro-Nevada said.

It said the payment rate is graduated from a three percent net smelter return (NSR) at a gold price of US$325 per ounce to a seven percent NSR at US$410 per ounce or more. At the current gold price of US$383, the applicable rate is six percent NSR.

It said the rate is effective on the first 1.5 million ounces of gold and all silver produced by the operator.

Mt. Muro proven mineral ore reserves at Dec. 31, 1994 were reported by the operator to be in excess of 1.0 million ounces of gold and 23.6 million ounces of silver, it said.