Matachewan Consolidated Mines, Limited announces commencement of royalty from gold production
Tuesday, Nov 27, 2012Matachewan Consolidated Mines, Limited (TSX VENTURE:MCM.A) ("Matachewan or the "company") is pleased to announce the commencement of actual royalties earned from gold production at the Young Davidson mine operations.
The company reports that approximately 47,000 tonnes of ore was processed from the Matachewan property during October 2012, recovering 2,300 ounces of gold, and generating an estimated royalty of $215,000 US.
Under the terms of the agreement dated June 1, 1979 as amended, with Aurico Gold Inc. (TSX:AUQ) ("Aurico"), Matachewan earns a base royalty of $1.105 US per tonne of ore mined and processed from the former producing Matachewan mine property, an additional sliding scale royalty is also earned if the price of gold exceeds $270 US per ounce. This amounts to 5% of the increase per ounce recovered above the base rate of $270 US per ounce, the price is based on the average quarterly price of gold sold on the free market during the quarter that the ore is processed.
The property is located in Powell and Cairo Townships, Larder Lake Mining Division, Ontario, and forms a portion of the Young-Davidson mine operated by Aurico. The Young-Davidson mine commenced commercial production effective September 1, 2012.
Richard McCloskey, President and CEO of the company said that based on production and price expectations the Company anticipates the royalty stream to have a significant impact on future income.