Ruby Creek Resources, Inc., www.rubycreekresources.com – the mineral exploration and recovery firm, announced expansion of its operations in Tanzania today via acquisition of exclusive mineral and mining rights to the entirety of the Mkuvia Gold Project.
Adding 225 square kilometers to the previously acquired 125 sq km ($3M, closed March 2010) already operated by RBYC’s 70%-owned joint venture, Ruby Creek Resources (Tanzania) Limited, the signing of this $6M purchase agreement with Douglas Lake Minerals Inc. gives the Company control of the entire 380 sq km of the Mkuvia Gold Project.
Remaining ownership of the joint venture, RBYC Tanzania Ltd., is held by Douglas Lake (25%) and the original prospecting license holder, Mr. Mkuvia Maita (5%).
More than tripling the size of the Company’s mining rights, this agreement also specifies that – under the satisfaction of certain conditions – 4M restricted shares of RBYC common stock will be issued to Douglas Lake at the agreed upon price of $0.80 per share, or $3.2M towards the $6M figure.
The remaining cash payment of $2.8M will be paid over three years (ending June 1, 2013), with an option of satisfying the final payment of $1M via issuance of restricted shares of common stock valued on a volume-weighted average price for the prior 20 days to the payment date.
Also in the agreement is an option to pay an additional $1M to Douglas Lake for 75% control in the project, combined with similar rights in the purchase agreement for the original 125 sq km stake, the Company has the option to pay $2M for even greater control over the rich mineral-bearing site.
President and CEO of RBYC, and Managing Director of RBYC Tanzania Ltd., Robert Slavik, noted that this acquisition clears the way for implementation of large-scale production in this massive alluvial goldfield.
Slavik cited the recent reception of registration from Tanzania’s Ministry of Energy and Minerals, and the fact that government approval and permit filings for environmental and mining licenses were proceeding apace, as evidence that full-scale mining operations would get underway post-haste.
Slavik detailed interim activities as consisting of logistics, security, equipment and aviation-related talks in preparation for commencement, and stated the intention to extensively test “several alluvial mining processes”, pegging the start date for test mining operations as late July.