Indo Mines Ltd ASX IDO and partner Compass Resources NL ASX CMP have agreed to expedite
Indo Mines Ltd (ASX: IDO) and partner Compass Resources NL (ASX: CMP) have agreed to expedite the purchase of the highly prospective Nangali epithermal gold project in Peru, which they originally negotiated in June 2004 with a Newmont subsidiary.
Indo and Compass will now pay Minera LJB Normandy Peru US$150,000 on execution of the revised agreement terms (previously US$200,000) and will pay a 1.5% NSR production royalty (previously 2%). The revised agreement is expected to be signed by 30 June 2006.
Indo (30%) and Compass (70%) are responsible for their proportionate share of the payment and royalty.
Exploration completed by Newmont includes geological mapping, drainage and rock chip geochemical sampling and dipole-dipole IP traverses. This work has identified a zone of low-sulphidation epithermal quartz-carbonate veins with anomalous gold (up to 98.7 ppm) and silver (up to 814 ppm), which has a discontinuous strike extent of approximately 2 kilometres. No drilling has been undertaken, but drill sites have been identified and prepared by Newmont.
The recent election of Alan Garcia as President of Peru provides a more encouraging signal for continued growth of the Peru mining industry.
The completion of this revised agreement enables exploration planning to commence for a drill programme to test the high grade Nangali gold vein system against an improving political and social background.