Transatlantic Mining sizes up another set of claims in Montana

Precious and base metals explorer Transatlantic Mining Corp (CVE:TCO) is sizing up another set of claims in Montana.

The company has entered into an exclusive agreement to lease and purchase the Kearsage claim group (KCG) in Madison county in the state of Montana.

These claims are around four miles from the US Grant mine and mill complex currently leased by Transatlantic.

Transatlantic is embarking on a consolidation strategy of the district, and the latest deal gives it an exclusive right to all data and information on the KCG for a period of eight months, during which time the company will perform due diligence can be conducted.

Transatlantic is paying US$60,000 for the right to perform due diligence during the eight month period, after which it may pay a further US$40,000 to extend the rights by 12 months.

A second renewal term of ten years following the expiry of the first renewal term kicks in for consideration of US$8,333.33 per month (equivalent to US$100,000 a year) until Transatlantic reaches commercial production of a minimum of 30,000 ore tons per month.

Following achievement of commercial production of 30,000 ore tons per month the lease payments will increase to US$200,000 a year (payable in monthly instalments) or a 5% net smelter royalty – whichever is the greater.

Should production pass the 100,000 ore tons per month milestone, the the lease payments will increase to US$300,000 a year or a 10% net smelter royalty – whichever is the greater.

Transatlantic has the option to purchase the Kearsage Claim Group at any time with the payment of US$6mln minus any of the payments outlined above (i.e. lease payments, etc.).

The KCG has previously been mined and Transatlantic referred to a “historical estimate” of a mineral inventory of 600,000 ounces that, naturally, will have to be “proved up” to an official reserve estimate.

“The KCG provides exploration upside in the district with limited historical deep and lateral strike extension drilling. We will commence the due diligence program immediately,” said Bernie Sostak, chief executive officer of Transatlantic.

Story by ProactiveInvestors